Friday, December 26, 2014 9:41:50 PM
Everyone will make a lot of money. Let me give you a realistic example of what could happen.
Assumptions
1) SIAF will issue shares to new investors or an existing company in HK based on 2015 results.
2) SJAP+Abattoir will make $70M in 2015. Spin=off will be valued at P/E of 15.
3) We currently own 45% and 30% will be spun off
Current situation
- SIAF shareholders own 45%
- Garwor owns 55%
New situation
- SIAF shareholders own 31.5% (70% of 45%)
- New shareholders own 30%
- Garwor owns 38.5% (70% of 55%)
- SIAF maintains control
Total cash raised on behalf of SIAF shareholders =
(0.45 - 31.5) x $70M x 15 = $141.75M
30% tax payable? Then Net Gain = $100M
SIAF will use half for operations, the other half will be paid in the form of a quarterly dividend.
Total dividend = $50M/22M = $2.27/share
SIAF shareholders still own 31.5%, which value will be reflected in the share price.
0.315 x $70M x 15 / 22M = $15.03/share
The market doesn't have a choice but to give us fair value on our remaining stake in SJAP. Which could also boost the value of the other assets locked up in fishery etc.
Assumptions
1) SIAF will issue shares to new investors or an existing company in HK based on 2015 results.
2) SJAP+Abattoir will make $70M in 2015. Spin=off will be valued at P/E of 15.
3) We currently own 45% and 30% will be spun off
Current situation
- SIAF shareholders own 45%
- Garwor owns 55%
New situation
- SIAF shareholders own 31.5% (70% of 45%)
- New shareholders own 30%
- Garwor owns 38.5% (70% of 55%)
- SIAF maintains control
Total cash raised on behalf of SIAF shareholders =
(0.45 - 31.5) x $70M x 15 = $141.75M
30% tax payable? Then Net Gain = $100M
SIAF will use half for operations, the other half will be paid in the form of a quarterly dividend.
Total dividend = $50M/22M = $2.27/share
SIAF shareholders still own 31.5%, which value will be reflected in the share price.
0.315 x $70M x 15 / 22M = $15.03/share
The market doesn't have a choice but to give us fair value on our remaining stake in SJAP. Which could also boost the value of the other assets locked up in fishery etc.
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