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.
- 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.
- Net Debt to Asset is 51%. It was highly leveraged. Not a big issue since cash flow is consistent.
- 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.