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More problems for Technics Oil and Gas following Soilbuild’s owe money pay money

After today’s post that it is likely Technics Oil and Gas will have difficulty in paying Soilbuild Business Trust for their sale and lease back rental, today there are more announcements that perhaps Technics is a going concern.

This evening there are 2 more announcement.

The first announcement refers to the failure to follow through by a customer on a potential lifeboat built. An announcement of a contract is sometimes never the same as when a payment milestone is met and cash flow is recorded.

And they have 2 owe money pay money situation to add on top of Soilbuild Business Trusts.

Interestingly, if you like High Yield Dividend Stocks, Technics can be considered a real one where they pay good dividends in 2010 and 2011.

A failure to understand property business prospecting may cause you to not ask the important question: Are those two years the peak of operation and hard to repeat, or is this a new fundamental paradigm shift for Technics Oil and Gas?

Sometimes property business and stock prospecting is still required for risk management.

Nothing to do with the share price and all. The financial data would make you ask that question.

Technics Oil and Gas may have just Defaulted on Soilbuild Business REIT's Rent Payment
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Calvin Chong

Saturday 21st of May 2016

Our company is located diagonally across the Technic Oil & Gas company.

We will pass by their company whenever we go for our meal nearby the canteen. The still vacant building has had been sitting there for god knows how many years.

Me & my colleague always wonder why this listed company wasted its shareholder funds, erected a building and let it vacant, collecting dusts year-in year-out, & its still vacant even after Soilbuild Reit took over its lease.

The curious part is their share price was still robustly standing at 60~70 cents all time high & hardly winked (in fact thought of shorting their shares 1 year ago), while others more reputable O&G share price has already dropped like flies during the oil crisis period.

Kyith

Saturday 21st of May 2016

Hi Calvin, when you say the building is vacant, you are saying that when soilbuild business reit took over, technics is still leaving it empty?

KC

Friday 20th of May 2016

If the injunction sticks, then it may affect SB's DPS despite management's confidence. One should also wonder how their other offshore/oil and gas tenants are doing. This legal issue may be a long drawn out process and even if they successfully evict Technics from the land, it will be difficult to find a new tenant. Clearly, a lower rent/DPU impact is expected.

Kyith

Saturday 21st of May 2016

KC, thanks for your point of view. I agree with most of it, and I think leasing it out is challenging in this climate. Seems this legal tussle will be long drawn. Imagine if this is carried out in a condo you are trying to rent out by evicting your existing tenant.I wonder what could you do. could you still rent out?

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