Why 冯时能(冷眼) , Fong Siling pick MSC?

Malaysia Smelting Corporation

MSC is facing the restructuring of its Indonesia branch which cause the share price to slump since last year December. I think this is a valuable chance for investors to buy in on the dip as reasons below. So far, Icap  had bought in almost 2.9% of the shares. Mr Fong Siling had bought in 0.5 % of the shares. Will it fly from now? RM 3.79 today ? let's see what is the chairman of MSC say about this ?

21 May 2012

MSC EXPECTS TO RETURN TO PROFITS BASED ON EXPECTATION OF 10-YEAR TIN CONCESSION EXTENSION MALAYSIAN SMELTING CORPORATION's operations in Indonesia is expected to return to profitability in 2H-CY2012 said Group CEO, MOHD AJIB ANUAR in early Apr 2012. The Company hopes to secure another ten-year extension to its concession to mine tin in Indonesia after a planned stake selldown in its subsidiary there due to compliance with local government regulations.

Comment of Mr Fong Siling towards MSC:

Malaysia Smelting through a statement issued to Bursa Malaysia on March 9 announced a restructuring of Indonesia's tin business.

The reorganization will be conducted in two phases, completed after the interests of the company in Indonesia's tin, from the current 75%, reduced to 37.5%. An Indonesian company OSRL way through the subscription of shares, with 37.5 percent of Malaysia Smelting Indonesian business.

Before the reorganization, a subsidiary of Malaysia Smelting in Indonesia, through a special dividend, the undistributed net income distributed to shareholders, Malaysia Smelting will be able to share $ 33,750,000, or about 100 million ringgit.

The reorganization will take effect after the complete distribution of the special dividend.

Malaysia Smelting and business restructuring in response to the Government of Indonesia's new mining policy.

Invitation of the Indonesian company shares

In fact, the company is in Indonesia, business liquidation, inviting Indonesian company shares, re-starting.

Malaysia Smelting is the acquisition of tin in India Ni Bangjia Island 10 years ago, to the Australian company, to be developed, one of the company's main source of profit.

Bali (KOBA), Columbia, the company has a 75% stake in tin in the printed 尼邦加伯里 winter Island made 41,680 hectares (103,000 acres) of mining rights for a period of 10 years, the mining rights will be expire on March 31, 2013.

The equity condition is to seek an extension of the mining rights for 10 years

The Indonesia the company OSRL the shares: the company must request and approval to the Government of Indonesia to extend the mining rights for 10 to March 31, 2023. If OSRL can not do equity participation agreement will automatically lapse.

Indonesian Minister of Energy and Mineral Resources recently announced that foreign companies mining in Indonesia must be in 10 years, phased off the sale of equity to the Indonesian investors, 10 years after Indonesia must have a 51% stake of the foreign mining companies.

Malaysia Smelting restructuring of Indonesia's business plan will be early in line with Indonesia's new mining policy, so that the company no worries.

Indonesian authorities suddenly announced a temporary ban, with effect from October 1 last year, the brother Bali tin exports The company produces tin, this led to the Malaysia Smelting in the fourth quarter of last year, suffered the loss of up to 45.87 million ringgit. (See 3 dated 3 "cold Essays column Malaysia Smelting gutter capsize)

Therefore, I believe that the equity restructuring of Malaysia Smelting Indonesian business is to solve this problem once and for all, so back on the road and continue to develop business in Indonesia.

Restructuring of equity variation

It can be seen from the photos, Malaysia Smelting originally has a 100% stake in Indonesia BCL, BCL 75% of control brother Bali (KOBA) of tin.

The first phase of the reorganization, to subscribe in cash for 23% equity interest in BCL by Indonesian company OSRL, equity, OSRL immediately Bangka mining rights to Indonesia to obtain an extension of 10 years, If OSRL can not be done, the shares will automatically lapse. Allowed to extend by ten years in the mining rights OSRL the right to subscribe to the BCL and another 27 percent stake in the company of the shares of BCL equal to 50 percent, and Malaysia Smelting.

BCL has a brother Bali tin of 75% equity, so the effective interest Malaysia Smelting OSRL in the Colombian Bali tin are 37.5% (50% x 75% = 37.5%).

After the reorganization of a number of impact

As shareholders of the Malaysia Smelting, I believe that we are concerned, the impact of the restructuring of the company:

The ① Malaysia Smelting to retrieve 100 million ringgit in cash (exact number to be decided to industry valuation). The company can reduce debt or invest in new business or rolled back a portion to shareholders, in any case this sum, are beneficial to shareholders.

② Last year, Malaysia Smelting tin melting factory in Perak high black tin ore field (ie former Raman mine) are very huge profits, because the last quarter of tired of the Indonesian business, and reduce full-year earnings this reorganization will completely solve the plight of Indonesian business, Indonesian business in the future not only will not drag on the company, the opposite will contribute.

3 Malaysia Smelting interests in Indonesia by 75 percent to 37.5 percent, but is expected to expand its scope to compensate for the reduction of the equity. I believe new shareholders OSRL has a strong background, has the ability to obtain more exploration and mining rights. In fact, Malaysia Smelting In a statement also made it clear that OSRL will support the expansion of the BCL's business.

This restructuring is complete elimination of worry and uncertainty of the company's long-term, beneficial to the future of the company.