In today’s briefing:
- NWD (17 HK): The Strings Attached To Latest Debt Financing
- Johns Lyng (JLG AU): A PEP-Sponsored MBO
NWD (17 HK): The Strings Attached To Latest Debt Financing
- This “rescue package” announcement late last month came as no surprise, as the alternative situation (liquidation/bankruptcy) for New World Development (17 HK), and the ensuing optics were not great.
- Media reports are now coming in that NWD is reportedly seeking to sell – or accelerate the sale – of its real estate projects in China.
- That makes sense. The refinancing afforded NWD some breathing space. However, to strengthen/bolster its balance sheet, NWD needs to offload assets. Yet pinning down a “fair” valuation will take time.
Johns Lyng (JLG AU): A PEP-Sponsored MBO
- Johns Lyng (JLG AU) has entered a scheme implementation deed with Pacific Equity Partners (PEP) at A$4.00, a 57.5% premium to the undisturbed price of A$2.54 (10 June).
- The offer is effectively an MBO as the CEO and key executives will rollover their shares. The offer requires regulatory (FIRB and US) and shareholder approvals.
- The offer is arguably opportunistically timed to capitalise on the FY2025 guidance downgrade in February. However, it is reasonable, given the high uncertainty surrounding the timing of an earnings recovery.
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