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Asian Pay Television Trust (APTT) IPO

The prospectus for this IPO is out.  You can read it here. Many would have been very appealed by its Starhub like business and a really high yield.

The trust is seeking to pay a yield of 8.25%-9.0% in 2014.

Would I go for it. In a word no.

The main reasons are listed here

MIIF failed to sell APTT at higher prices

While the cornerstone investors look good especially George Soros Quantum fund, it should be said that to realize value, MIIF tried to sell TBC at a price better than book value.

There were no takers, so they say.

So if we buy in now, we are being the contrarian with something most investors do not want.

Pre IPO Financial Statements

For those that are interested in how it was operating before IPO can turn to page 41,42 and 43.

  1. Profit have been in a loss from 2010 to 2012. Why is that? When your operating profit is 132 mil and your interest and finance cost is 122 mil, of course it will show a loss.
  2. Net Debt to Asset is 51%. It was highly leveraged. Not a big issue since cash flow is consistent.
  3. Free Cash Flow average at 120-140 mil. But interest payment average 51 mil. So they are left with 70 mil –80 mil to pay for dividends.


This may be a stupid mistake not to get involve with this but honestly the worse thing about this trust is their association with Macquarie.

Our experience with MIIF have warn us a few times its better not to touch them.

I will also remove MIIF from my Dividend Stock Tracker.

Make use of the free Stock Portfolio Tracker to track your dividend stock by transactions to show your total returns.


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Monday 6th of May 2013

thanks for sharing yr view, i am inclined to go in for a quick flip The business is almost monopoly like, i think there is no set expiry date? Also the dismal interest rate return from other fixed income stuff makes this one (risky but has some meat) more palatable.


Friday 3rd of May 2013

Furthermore, MiIF traded at 61 cts yesterday. Buying into MiIF prior to ex entitlement gives you the following advantages

1) encash near to 46 cts in value (by conservative estimates depending on offer price)

2) remaining assets distributes in a very bad scenario 1.5cts a year. For a 15cts counter, that's rather decent

3) direct involvement into a high profile IPO without the need to ballot (APTT units option). Helps even more with low yield environment and a proxy like starhub trading at such dividend yields level.

Don't agree that you should take MIIF out of your div stock picker now as it is in a rather sweet spot.


Friday 3rd of May 2013

Don't mind my bluntness but your call here is rather limp

1) Failing to sell at higher prices - the business is worthed more than a billion, illiquid and unlisted. There are not many that can fund such an acquisition and of course would take the chance to slash the price. Soros is buying, he was right about the GBP and the yen recently and more. You want to be contrarian against him instead?

2) In losses from 2010 to 2012 - you should go check out what the interest and financing costs is about before commenting on this. Like what JR said... Some accounting knowledge would be good here.

3) Net Debt to Assets Ratio - Starhub is nearly insolvent by your standards. It's the nature of this industry. Enough said.

4) FCF - not sure what your driving at here but absolute figures are meaningless, either do a percentage or per share basis.

Only point I agree with you is the MiIF management.


Friday 3rd of May 2013

Btw, I still don't get what is the issue with the high financing cost and accounting knowledge. I am not an accounts train person, unless you are telling me that is not the be all end all


Friday 3rd of May 2013

Hi tissot,

Thanks and you are right on all accounts, but I will still see this through as a bias proposition.

The management is enough to put me off. Further, I did not look thoroughly the prospectus. The past history is more of a note to myself. For no times did I say the large debt is a big consideration.

That was error on my end.

Was 1.5 cents a conservative estimate. I would think it's closer to 1.8. Still a good deal.

There is a thing about quantum fund and prudential (who most of the time looks to make a right move from my observation).


Thursday 2nd of May 2013

Hi hi. could the reason why nobody is willing to pay for the TBC is because they are demanding a higher return than the 8.25-9% yield offered? One reason could be because of the liquidity premium of being a unlisted asset, and private equity firms might require 15% to over 20% returns before they might want to invest in the asset. Companies with an ROI target of above 15% wouldnt touch the asset either.


Thursday 2nd of May 2013

hi I0nEr, possible, but they could have shopped it to other telecoms in the region. If the ROA or ROIC is that appealing it would have been snagged.


Thursday 2nd of May 2013

You should get yourself some accounting knowledge before you comment this. Your call is rather shallow.


Thursday 2nd of May 2013

perhaps you can educate me where i went wrong

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