Baker Technology

[Aspellian]

Mainboard-listed Baker Technology, a manufacturer and provider of specialised marine offshore equipment and services for the oil and gas industry, says group revenue for the six months ended June 30 2009 (1H2009) rose 110% to $34.9 million reflecting the recognition of a full six months’ contributions from its core operating subsidiary Sea Deep, compared to just two months in 1H2008.

The group also says it achieved a gross profit in 1H2009 of $17.6 million on the back of higher margin contributions from certain projects that were near completion in the second quarter.

Half-year share of losses from its 49%-owned associate York was $543,000, compared to a share of profit of $604,000 a year ago, says the manufacturer. York, which manufactures and distributes trailer axles continues to be adversely affected by the global economic slowdown which has dampened demand in the industrial automotive sector.

[millionairemind]

I tot Baker Tech is the half brudder of BreadTalk...

[kennynah]

it's breadtalk's IT Services arm....

[Aspellian]

i never heard of this co - tot it was in mfg sectors doing baking machines
didnt know it is in O&G too. haha! selling bread to the sailors!

[millionairemind]

November 3, 2009, 5.50 pm (Singapore time)

Baker Technology's Q3 net profit up 120%

By ANGELA TAN

Baker Technology Limited on Tuesday reported net profit for the third quarter to end September rose 120 per cent to S$18.67 million, compared to S$8.50 million a year ago.

The maker of specialised marine offshore equipment and services for the oil and gas industry said revenue rose 10 per cent to S$28.78 million compared to a year ago. This was due to the completion and nearcompletion of contracts for the fabrication of specialised steel structures.

The group expects to be profitable in the fourth quarter of FY2009.

[Blackjack]

Counter closed close to 12% higher on high volume.

Baker Tech's Q1 net profit falls 60%

Baker Technology Limited, a provider of marine offshore equipment and services for the oil and gas industry, reported on Thursday net profit for the three months ended March 31, 2010 fell 60 per cent year-on-year to S$2.45 million.

For the first quarter, the group's revenue fell 66 per cent at S$6.21 million as projects were postponed during the global credit crunch.

The group is evaluating an offer by Yangzijiang Shipbuilding Holdings Limited to buy its subsidiary, PPL Holdings Pte Ltd (PPLH) for US$155 million.

PPLH holds a 15 per cent stake in PPL Shipyard Pte Ltd, a company engaged in the design and construction of offshore drilling rigs for shallow to deep waters.

[Aspellian]

Baker counter again halted. probably tomorrow they will announce their decision on offer from YZJ.

if indeed they agree to sell and pocket the gain, is it a case of buy on rumour, sell on news? or the counter can cheong even more --> and against the rising tide of Bear?

but note that Baker has break out of its 3 year multi-high of 55cents very convincingly today.

tmr will be another interesting day.

(not vested)

[Aspellian]

Interesting development:

Baker Tech announced the following:

The Board wishes to announce that the Company has today accepted the Offer by the Purchaser, for the Company to sell to the Purchaser the entire issued and paid-up share capital of PPLH held by the Company on the terms and conditions as set out in the Letter of Offer (the “Proposed Disposal”).

Rationale
The Proposed Disposal will enable the Company to unlock the value of its investment in PPLH having regard to the significant gain on disposal of approximately S$205.28 million.
The Directors are of the view that the Proposed Disposal is in the best interests of the Company.

Adjusted NTA is 45cents.

(B) LETTER FROM SCM IN RELATION TO THE OFFER BY THE PURCHASER
The Company received a letter on 22 April 2010 from SCM through its lawyers demanding that the Company not accept the Offer. SCM is the owner of 85% interest in the capital of PPL Shipyard. SCM has alleged that any sale to the Purchaser of the shares of PPLH by the Company would be made in circumvention of the pre-emptive rights of SCM in PPL Shipyard’s Articles of Association by not giving SCM a first right of refusal over the sale of PPLH’s shareholdings in PPL Shipyard.
The Board has sought and received legal advice that SCM has no basis for its claims.

Comments: I will have thought that all these are ironed out previously. Unless Sembcorp sees YZJ as a competitor. Interesting to note that there are 2 directors of Baker Tech which are also on board of PPL - which is 85% owned by Sembcorp - which means PPL's board should be mainly comprise of Sembcorp Marine's own board.

A quick check of Sembcorp Marine directors sitting on PPL Shipyard board:
Mr WOng Weng Sun - CEO of Sembcorp Marine
Mr Tan Kwi Kin - Senior advisor - ex-CEO
Mr Tang Kin Fei - director - Current CEO of Sembcorp Industries (parent of SCMarine) - He is the Chairman of PPL Shipyard

So Sembcorp Marine should have known early of the deal because the directors sit crossed among boards. Unless Baker Board insist on selling as that's the best for Baker Tech.

Note that Baker Tech's Chairman is ex-CEO of NTUC Fairprice, Baker's CEO is deputy chairman of PPL Shipyard.

So what will be the effect on share price?
Will there be a counter offer from SembMarine? If its truly with pre-emptive rights, then will SCM exercise its rights of paying such rich premium for 15% of PPL? noting that SCM already has so many on-going projects and new shipyards, S$200mln is no small sum too.
Or will SCM go via legal route and block the sale and have a ugly tussle? doesnt look too good unless YZJ's intention is not good. assuming SCM doesnt want to fork out $ to buy over the stake, then if it can find an excuse to block the sale without having to exercise its pre-empt rights, more convenient?

initially i thought SCM going CHina route aggressively, with stake in Cosco, partners with YZJ (if Baker sale of PPL goes through). EPC contractor for SCM's new Tuas shipyard also major CHina constructor (with links to military?? i thought so).

ultimately, what's the impact to share price? seems more of uncertainty... the last para of announcement doesnt sounds too positive. will SCM move one more step (for face purpose) to block the sale? share price of baker maybe challenged come monday - my 0.5cents view. interesting to note from the sidelines now.

Cheers!

[Aspellian]

ANNOUNCEMENT BY SEMBCORP MARINE LTD
Singapore, April 26, 2010 : The Company presently holds an 85% shareholding stake in PPL Shipyard Pte Ltd (“PPL Shipyard”). PPL Holdings Pte Ltd (“PPLH”), a wholly owned subsidiary of Baker Technology Limited (“Baker Tech”), holds an aggregate direct and indirect 15% shareholding interest in PPL Shipyard.

On 17 April 2010, the Board of Yangzijiang Shipbuilding (Holdings) Ltd (“Yangzijiang”) announced, inter alia, that it had issued a binding letter of offer to Baker Tech to acquire the entire issued and paid-up share capital of PPLH (“the Offer”).

The Company had through its solicitors, Drew & Napier LLC, sent a letter to Baker Tech and PPLH asserting, inter alia, that the circumstances have triggered its pre-emption rights over its aggregate 15% stake in PPL Shipyard. The Company has also put Yangzijiang on notice of its rights.

The Company is now assessing the position taken by both Baker Technology and Yangzijiang and will make the appropriate announcement in due course.
_____________________________________________________________
Comments: This could be what caused the fall in YZJ's price before Baker announced. Surprising turn of events as one will thought that with the intertwinned of directors, this could be resolved in the board room of Baker Tech - pre-emptive rights are too obvious to be missed by either parties before the announcements made.

Likely boardroom tussle by Baker Tech who feels that it has nothing to lose, prob Sembcorp marine not interested to buy over its remainder 15%? cos the valuation paid by YZJ is excessive? interesting see how all these panned out.

clarity can only be obtained if one knows what the pre-emptive rights clause said - but most likely if i am Baker tech, the clause would have said that its for Sembcorp marine to exercise at the prevailing offer price. unless sembcorp marine then has bargaining power, and said it will exercise its own due diligence and valuation - if there's any disputes, an independent valuer will be appointed to assess the intrnsic value of 15%.

opportunity to buy Baker Tech? risk and reward, game of probability. but this will be an overhang on Baker share price. if it does drop to near its support of or < 50cents, prob worth a shot.

<not vested>

[Aspellian]

UPDATE OF ANNOUNCEMENT BY SEMBCORP MARINE LTD
Singapore, April 29, 2010: On April 26, 2010, the Company made an announcement stating that its pre-emption rights in respect of an aggregate direct and indirect 15% shareholding interest in PPL Shipyard Pte Ltd (“PPL
Shipyard”) held by PPL Holdings Pte Ltd (“PPLH”) have been triggered.

The Company has today tendered payment of S$59,433,522 to PPLH for the purchase of PPLH’s direct and indirect 15% shareholding interest in PPL Shipyard, and has asked PPLH to transfer these shares to the Company pursuant to the parties’ agreement.

PPLH has rejected the payment. The Company will take the necessary steps to enforce its rights and will provide the update when required.