Prosperity Minerals Share Discussion Threads

[look alive] 19/4/2013 09:56

Significant announcement this morning that LIM Asian Special Situations have increased their stake by nearly 2m shares to 6.53%.

[utterly pointless] 17/4/2013 11:18

DrC - Thanks. I think I'll need it.

[look alive] 17/4/2013 11:12

I think Dr C is right. The ACC shares are only used as security for PMHL loans,not those of the Parent Company. PIHL have to report what their subsidiary is doing.

[dr contrarian] 17/4/2013 11:08

UP - I agree that Daniel Stewart should be doing a better job as broker to the Company.

I see you are following a few other stocks in gold / mining - good luck with that.

[utterly pointless] 17/4/2013 10:52

Hi Dr - I've already sold so the question is academic only to me. If they're using the ACC shares to guarantee PMHL lending then the only impact is that they can't sell the ACC shares without releasing the guarantee (i.e. repaying the lending). If they're using the ACC shares to guarantee PIHL lending, that's a different kettle of fish altogether. I can see your point though. It again illustrates the importance of having a decent broker rather than the utterly useless Daniel Stewart.

[dr contrarian] 17/4/2013 10:30

UP - As far as I can see, as the figures are in PMHL's accounts also. That ACC was used as security for PMHL purposes. PIHL are reporting this security as their loan as PMHL are classified as a subsidary of PMHL.

Do not really see a problem with PMHL using this to guarantee for a loan, looking at their balance sheet, which is full of cash. Meanwhile the stake in ACC trades at 71p per share, so sell at 60p if you wish, I believe this year will see a decent rerating as the property development profits are booked.

[eddie catflap] 17/4/2013 10:11

Was having a look around to see if they did announce this arrangement. Not found it yet but had forgotten about this from 26/10/11...

Under the terms of the Relationship Deed, PIHL has undertaken to ensure that Prosperity and its subsidiaries (the "Group") can at all times carry on their business independently of the control which PIHL would otherwise be able to exercise by virtue of its shareholding and that all transactions between PIHL, Prosperity and any other member of the Group will be carried out at arm's length and on a normal commercial basis. In particular, PIHL has undertaken that it will not seek to influence any Director of any Group company in relation to the day to day operational or managerial control of Prosperity or any other Group company...

[utterly pointless] 17/4/2013 10:00

pleasure. it's even clearer if you read the pihl accounts. it really alarmed me as i've been following pmhl for many years and recall no rns about this (which is highly material). i'd want to know (i) when this arose (ii) whether it was publicly announced (iii) whether pmhl is receiving a market value fee for the guarantee (i bet it's not).

[eddie catflap] 17/4/2013 09:51

Cheers UP for heads up.

Found it.

It's a circular reference in the accounts (avoiding too much detail?) Refers you to note 15a which tells you to look at 22c. 22c tells you to look at 15a.

Pages 102 and 111 on my PDF display



15a
Note:
(a)
The market value of the Group's interest in the listed associate, ACC, at 31 March 2012 amounted to
US$142,617,000 (2011: US$255,035,000). As at 31 March 2012, the shares in ACC were pledged to secure a bank
loan of the Group (note 22(c)).


---------
22c

111
Prosperity Minerals Holdings Limited
Annual Report 2012
Notes to the Consolidated Financial Statements
(Continued)
22
B
ANK
LOANS
AND
BANKING
FACILITIES
(Continued)
(c)
The carrying value of the pledged assets at the end of the reporting period for the Group's
secured bank loans and banking facilities is as follows:
At 31 March
2012
2011
US$'000
US$'000
Restricted deposits (note 20)
2,171
7,647
Investment properties (note 12)
28,525
25,117
Investment properties under development (note 12)
71,198
89,475
Properties under development for sale (note 18)
40,539
189,004
Shares in ACC (note 15(a)

[john henry] 16/4/2013 09:12

UP, hadn't realised this, will re read the accounts.

Thank you for highlighting, would go some way to explaining the share price

[utterly pointless] 16/4/2013 08:51

Just a wee heads up. I had a substantial holding in this - about 400,000+ - which I have now sold out of so now might be a good time to buy back in (if you want). But just a word as to why I sold out. The appalling corporate governance is well known about - anyone spot the last non-related party transaction PMHL entered into? Less well known about is the huge (potential) hole in PMHL's balance sheet arising from the fact that at some point in time PMHL pledged its shareholding in ACC (which makes up a good part of the value of the share) as collateral for some of PIHL's borrowings - which keep going up. Just read the accounts. It's buried in the notes for both PIHL and PMHL's accounts...

[philjeans] 11/4/2013 14:53

Yes - not a bad package!

Interesting radio broadcast on CAMK thread.

O/T I hold other Chinese stocks; 2233 (WCC) and NBU.

[dr contrarian] 11/4/2013 13:20

In the meantime, while waiting for a possible buyout - Content to play the waiting game for the proper recognition of the underlying assets, trading update, results, 10% dividend yield.

[dr contrarian] 11/4/2013 10:51

Agreed Phil we deserve a good run here, have also varied my investment here over the last few years, though felt it was time to up my stake over the past few months as the underlying situation has improved.

With regards to the Buyout - there was talk of a buyout last year around 130p - still seems cheap for all the assets here - but at double the current price I guess a few would be tempted.

Recently noticed LIM were given the option of disposing of their 5% stake in PMHL also at 130p per share, however they would have to take PIHL shares not cash.

[dr contrarian] 11/4/2013 10:40

A few headlines that should help the Trading Update when it comes -

Iron ore hits 1-month peak as China restocking feeds rally



ACC stake valued at 65p per PMHL share (up 5% last night)



Guangzhou development now around 90% pre sold, at current selling rates development should be completely presold by the time the full year results are announced

[philjeans] 11/4/2013 10:32

Been in and out of these for years!

About time we had a really good run though - chart has been awful for ages.

Prop sales coming through now and we still all dream of a generous buyout..............

[dr contrarian] 11/4/2013 10:28

Yes - Good to see a few Buys as well - Just checked the online trading - very difficult to pick up any shares at all.

LA - Could well be the case - though I am not too worried when the update comes now - noticed Wong picked up a few more in PIHL (£375k) last week.

[look alive] 11/4/2013 10:16

The absence of a trading update so far may be related to Wongs purchase of shares in the Parent Company just before the year end.

[dr contrarian] 11/4/2013 10:02

Phil - Seems there are a few value stock investors still out there - Have a small stake in CAMK as well.

[philjeans] 11/4/2013 09:56

Some sizeable BUYS this morning - good news coming?

[dr contrarian] 02/4/2013 10:41

Also just noticed that Mackenzie (the largest significant UK instutional holder of the stock - approx 12%) added to their stake for the first time in years at the end of last year.

[edmundshaw] 02/4/2013 10:38

Still crazy cheap. Added recently myself...

[dr contrarian] 02/4/2013 10:31

che - Would be good :-) - instant 50 - 100% rise in the Share price.

Perhaps Wong is still waiting for a good time for an opportunistic bid approach for the remaining shares.

[che7win] 02/4/2013 10:24

Dr,
A crazy valuation, why don't they divest the cement business to investors?