Amid all media publicity and euphora on Perwaja/Zhiyuan, as stock investors, cool down and think carefully on below, as reported in Starbiz & The Edge this Saturday, (1) " It is just an MOU with no real commitment" "I don't know the deal, just an MOU, not sure a done deal yet" supposedly said by 61% owner of Perwaja Tan Sri Abu Sahid (2) Due diligence has to be done by Zhiyuan which takes at least 3 months. By then, on careful study, Chinese will find out more about how bad or good the situation Perwaja was in (3) As reported, even if Zhiyuan wants to get involved, after due diligence and signing definitive agreement, there is no real injection of "real hard cash" to settle the massive RM2.2B debts. First phase, as reported, will involve import of equipment (their old equipment evaluated at higher price to get more Perwaja share?) only to produce items on a "leased land" in Perwaja, probably under their company name. Nothing to do with Perwaja and or is addressing the huge debt issue, probably this way. Even for 2nd phase involving RM200m, it is also equipment injected not hard cash. To quote Starbiz, "will this RM300m investment in equipment enough to get operational profit to pay off the massive RM2.2B debt?". Very smart Chinese, use a separate leased land and own imported equipment to produce things while avoid getting messed up with the debt loaded Perwaja. (4) Require major creditors like banks, TNB, Petronas, etc, and regulatory authorities to approve the plan, especially on the viability of injection of merely RM300m equipment and its subsequent operational cash flow to repay them and, perhaps, massive haircuts proposed on their debts, especially after more than 2 years. (5) Continual very bad local and global market condition, including stainless and in fact all metallic commodity, and Chinese cheap imports or dumping of steel products will be a serious factor to consider. In conclusion, will not touch this counter due to very high uncertainty and risks associated as it may delisted if the scheme does not work eventually and our investment is worth a scrap paper.

MOU, MOU, MOU....high high risk if buy this share rated zero (0) for Fundamentals and Valuation by the EDGE. FkLI13 fully agreed with u.

Abu Sahid absent in Perwaja deal
By NG BEI SHAN beishan@thestar.com.my
StarBiz
9 May 2015

THE absence of Perwaja Holdings Bhd’s major shareholder, Tan Sri Abu Sahid Mohamed, was conspicuous during the signing ceremony between the company and its potential partner, TianJin Zhiyuan Investment Group Co Ltd.
The gutsy businessman has a 63% interest in the local steelmaker with a market value of RM114.8mil.
When contacted, Abu Sahid tells StarBizWeek: “I don’t know the deal… It is a memorandum of understanding (MoU), so I won’t know if it’s a done deal. But if it’s good for the company, why not? Datuk Alan Ong sits on Maju Holdings Sdn Bhd’s board. He is a smart guy. He knows what to do.”
Maju Holdings is Abu Sahid’s flagship company.
While Abu Sahid’s tone sounded ambiguous, the partner whom he had roped in nine years back, Tan Sri Pheng Yin Huah, has a different tone.
Speaking at the signing ceremony, Pheng said: “Transformation is not a choice; it is a necessary path to take.”
Pheng told an audience which included bankers and the media that Zhiyuan’s injection of some RM300mil into the PN17 company would give its halted operations a new lease of life.
Perwaja’s Kemaman plant in Terengganu has stopped operations since August 2013. It still owes Tenaga Nasional Bhd and Petroliam Nasional Bhd utility expenses of RM450mil.
The two parties have signed an MoU for Zhiyuan to invest in Perwaja.
In the first part of the plan, Zhiyuan would invest no less than RM100mil to restart Perwaja’s existing operations. Of the RM100mil, RM30mil would be in the form of lease depository for the leasing of Perwaja’s land.
Next, Zhiyuan would pump in more money to bring in new machinery, as well as to modify Perwaja’s existing ones so that it can venture into making semi-finished alloy products.
According to Zhiyuan’s chairman Zhang Zhong, the China-based investor intended to see the plant producing 400,000 tonnes of alloy per year in three to six months after the completion of the deal.
Eventually, Perwaja will be repositioned to be a stainless steelmaker, producing up to 800,000 tonnes of alloy annually.
But all that is subject to the approval of the regulators and Perwaja’s creditors.
For one, the land that Perwaja intends to lease to Zhiyuan is charged to the banks. Without a nod from the lenders, both parties would not be able to kickstart the plan.
Commenting on creditors’ response towards this collaboration, Perwaja’s Ong says: “We’d hope that the creditors are in
favour (of this plan).”
Bear in mind that Perwaja’s total debt stands at RM2.2bil and it has many stakeholders to answer to. Its cumulative losses recorded RM1.9bil as at its second quarter ended Dec 31, 2014.
The book value of its Kemaman plant and land was worth RM51.3mil as at June 30, 2014, while the group’s total book value stood at RM1.23bil.
Asked why Zhiyuan chose Perwaja, Zhang says the group – which was set up in the late 1990s – has the expertise and network to transform Perwaja.
Zhiyuan has ventures in minerals, chemicals, alloys, real estate and logistics, with a footprint across several countries.
Zhang adds that the plan is for Perwaja to move upwards to a higher-value alloy and steer away from its traditional steel business.
There is a glut in steel supply globally and the stiff competition has depressed steel prices.
Steel billet prices have fallen more than 20% or about US$100 (RM361.5) per tonne year-on-year to US$300 (RM1,084.5.

Agreed. 63% major shareholder of Perwaja and 25% shareholder of Kinsteel Tan Sri Abu was absent and said it was MOU and not sure it is done deal. Smell fishy? The Star ePaper -http://mystar.newspaperdirect.com/epaper/iphone/homepage.aspx?isBookmark=true&locationHash=%23_articlef307686a-ca1f-4f80-a7c8-7d8872ca0cc6%2fwaarticlef307686a-ca1f-4f80-a7c8-7d8872ca0cc6%2fLZNAYDTPW2F8#_articlef307686a-ca1f-4f80-a7c8-7d8872ca0cc6

09/05/2015 05:53

Anyway read Starbiz today

Agreed. 63% major shareholder of Perwaja and 25% shareholder of Kinsteel Tan Sri Abu was absent and said it was MOU and not sure it is done deal. Smell fishy? The Star ePaper - http://mystar.newspaperdirect.com/epaper/iphone/homepage.aspx?isBookmark=true&locationHash=%23_articlef307686a-ca1f-4f80-a7c8-7d8872ca0cc6%2fwaarticlef307686a-ca1f-4f80-a7c8-7d8872ca0cc6%2fLZNAYDTPW2F8#_articlef307686a-ca1f-4f80-a7c8-7d8872ca0cc6

Somehow, still many die hard quickly jumping into the big trap on hearing some news such as signing of MOU or MOA to study this and that, but legally non binding. Remembered 100 over MOU were signed between many Malaysian companies and Chinese companies in the 1995 (Dr Mahathir visit to Beijing)? 99% of it were still MOU and nothing went into definitive agreement for implementation. Many got burnt.

I think there are two major obstacles to overcome: Firstly Chinese group needs to do a thorough due diligence on it and must be fully satisfied with it before signing any definitive agreement. What is signed is only MOA. This will take months. Secondly, major creditors' (especially the banks, TNB, Petronas) approval is required on the proposed restructuring scheme on how to repay their debt. So, still a lot of uncertainty and high risks ahead. Just views to share and be cautious.

Shellhouse views are very fair and correct, for any value and smart investor looking at mid or long term gain. Besides the above, look at their extremely high debt and their corporate guarantee of RM700M of Perwaja debt. Please check on their Bursa announcement on their debt settlement agreement with their banks in order to understand the situation this counter is in.

Sorry, buying volume 3.3m

Presently, Selling volume (16m) Buying volume (0.33m) ....sharks and speculators dumping their stock..

My advice: last chance to exit...

Reported in Star..signing a MOA (not sales n purchase agreement) this Friday. News discounted already. Stainless steel production ... joke to those who know steel making.

Export to China? Joking. Lion Group has to get MITI to help to impose anti dumping of hot rolled steel from China. Other steel mills also are petitioning government to stop cheap imports from China. All steel mills are bleeding since a few years already due to cheap Chinese import. Known fact lah.

Big sharks buy and accumulate before announcement. Ikan bilis buy after that, be careful. So long as it is MOU signed to do feasibility study, be wary of this trap. Better hit n run and earn coffee money.

Sharks will buy before announcement. Ikan bilis must be careful..

So long as it is just a MOU signed, be careful. Also remember there shall definitely be a huge capital reduction (to account for the huge loss/bad balance sheet) in the restructuring plan if it is ever can take off. Kinsteel capital reduction is proposed to be from 20 cts to 5 cts as per Bursa announcement earlier. Take account of this, brothers, as you buy it before this. Hit and run may be...

So long as it is jus a MOU signed, must be careful, that is all. Take risk at your own peril.

Big boys: buy before news out, sell after news out...

Big boys: buy before news out, sell after news are announced.

If so good, why sell?

If so good, why sell like mad?

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4725537

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4725537

Bursa Announcement Subject: DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS):

Tan Sri Dato' Seri Pheng Yin Huah disposed 18,000,000 shares.

Total Equity (shareholder fund) is NEGATIVE RM935 million! Current Liability RM1.7 billions vs Current Asset RM157 million! Reported in 31 Dec 2014 account per Bursa record.

Mapsscom..... good info ... investors be careful, once trapped, sorry lah.

Why don't you all goggle "Zhiyuan China" or "Zhiyuan" or ........
and see if you could find anything?

Perwaja announcement on 30 April 2015

(a)        A Second Memorandum of Agreement between Perwaja and Zhiyuan to formalise the parties’ agreement to revamp and restart the Kemaman Plant pending the procurement of all requisite approvals to implement Perwaja’s Proposed Regularisation Scheme; and

(b)        A Lease Agreement between Perwaja Steel Sdn Bhd (“PSSB”), a wholly-owned subsidiary of Perwaja and Zhiyuan in relation to the lease by PSSB of a portion of the land forming the Kemaman Plant to Zhiyuan.

Capital injection? Debt settlement?

Any one can sign MOU with any buyer to do investment feasibility study or even sign a formal sale & purchase agreement but with some pre-conditions (exit or escape clauses) included which automatically allow agreement to be terminated if conditions not fulfilled within a specified period. Advice is there must a real injection of hard $$$ and consent of takeover by their banks or creditors. Dateline for this is 15 July. Speculate and take high risk at your own choice even if there is even an announcement before 15th May. It is a zero fundamental counter and risk is very very high. Perhaps do a hit and run. Happened many times before.

Big guys laughing all the way to the banks..

Happy go hunting or be hunted.... hit and run all right

Already 3rd or 4th traps... happy go hunting or being hunted.

Musical chair... better hit and run... be careful..

Relax...brothers

UMNO hidup!

Company has been privatized since 1999. New owners now, Pheng family in Kuantan, do not bark at the wrong trees lah.

So some news in the paper, then go up and down again...so many rounds da, many ikan bilis kena trapped. Buaya singing and laughing. Ha ha

So some news in the paper, then go up and down again...so many rounds da, many ikan bilis kena trapped. Buaya laughing to the bank... ha ha

Ikan bilis jaga betul... kena sangkut nanti...

Buaya makan semua ikan bilis ..... ha ha

Buaya akan semua ikan bilis ini..

Buaya akan makan semua ikan bilis ini..

Ikan bilis mari mari banyak beli...

Just read the debt restructuring agreement between company and all its financial lenders... then can well understand why it is smarter to unload their shares to the uninformed ikan bilis ... ha ha.

Major shareholders selling... checked Bursa announcement.

Goven tak akan bantu Perwaja... 1MDB sudah cukup kepala pening..

Bursa Malaysia Securities Berhad (“Bursa Securities”) had on 13 April 2015 approved the application for an extension of time up to 31 July 2015 to submit the Company’s regularisation plan to the regulatory authorities subject to the Requisite Announcement being made by 15 May 2015.

The aforesaid extension of time is without prejudice to Bursa Securities’ rights to proceed to suspend the trading of the listed securities of Perwaja and to de-list the Company if:

(i)         the Company fails to make the Requisite Announcement on or before 15 May 2015;

(ii)        the Company fails to submit a regularisation plan to the authorities on or before 31 July 2015;

(iii)       the Company fails to obtain the approval from any of the regulatory authorities necessary for implementation of its regularisation plan; and

(iv)      the Company fails to implement its regularisation plan within the time frame or extended time frame stipulated by any of the regulatory authorities.

Upon occurrence of any events set out in (i) to (iv) above, Bursa Securities shall suspend the trading of the listed securities of Perwaja on the next market day after five (5) market days from the date of notification of suspension by Bursa Securities and de-list the Company, subject to the Company’s right to appeal against the delisting.


Caution to minority shareholders: beware!!!

Old news recycled. Then Chinese take over. Market get used to it. No feeling. Do not want to get trapped again and again.

Pls click Bursa announcement, major owners slowly unloading their shares from 10 to 13 March. Right now abt 1.4m shares seller vs 0.5m shares buyers. Small retailer investor, like us, be careful, basic rule in investing, beware of major owners selling big...75% capital reduction proposed n agreed by their banks. 75% hair cut...what u think will be its share intrinsic value? All the plans in restructuring including right issue etc are for paying old debts. Second rule in investing, work out its share intrinsic.