Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Nam Tai Property - An Interesting Activist Situation

Quiddity Advisors

On the 11th of September, IsZo Capital and other shareholders presented <a href="https://www.smartkarma.com/entities/nam-tai-property-inc" target="_blank" data-smartkarma-citation="entities:29275:1" rel="noopener">Nam Tai Property Inc (NTP US)</a> with certification of ownership above 30% and an official request to call a Shareholder General Meeting as per the bylaws. That started the clock ticking.The next business day, the Nam Tai CEO and Chairman of the Board Mr. Ying Chi Kwok, who happens to be the younger brother of the CEO of largest shareholder <a href="https://www.smartkarma.com/entities/kaisa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:169:1" rel="noopener">Kaisa Group Holdings (1638 HK)</a>, <a href="https://www.sec.gov/Archives/edgar/data/829365/000156459020043351/ntp-6k_20200914.htm" target="_blank" rel="noopener">resigned</a> "for personal reasons", effective immediately. A week later, Nam Tai <a href="https://www.sec.gov/Archives/edgar/data/829365/000156459020044137/ntp-6k_20200921.htm" target="_blank" rel="noopener">named</a> Dr Lai Ling Tam, to the role of Executive Chairman, and Mr Jiabiao Wang as CEO. Both are ex-Kaisa. So much for independence. In my previous insight <a href="https://www.smartkarma.com/insights/nam-tai-property-an-interesting-activist-situation" target="_blank" data-smartkarma-citation="insights:43183" rel="noopener">Nam Tai Property - An Interesting Activist Situation</a> which introduced the activist situation, I concluded by saying... <blockquote>...where the company has just spent a lot of cash last quarter buying the Dongguan asset and now that cash is depleted, there could be a risk of a downturn so the company would need to raise cash by offering shares. A third-party placement to a strong development partner like Kaisa might be engineered. It is often the way of things. It is specifically what the activists and their supporters are trying to make sure does not happen. But they are right to be worried that it might.</blockquote>And so it did. I was trying to be gentle in my wording. It is not clear that I needed to be. <a href="https://www.smartkarma.com/entities/nam-tai-property-inc" target="_blank" data-smartkarma-citation="entities:29275:1" rel="noopener">Nam Tai Property Inc (NTP US)</a> on 5 October announced pre-open that it had raised US$170mm through a private placement (PIPE) of common shares to <a href="https://www.smartkarma.com/entities/kaisa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:169:1" rel="noopener">Kaisa Group Holdings (1638 HK)</a>.There may be problems with this.  There may not be.More below the fold.

On the 11th of September, IsZo Capital and other shareholders presented Nam Tai Property Inc (NTP US) with certification of ownership above 30% and an official request to call a Shareholder General Meeting as per the bylaws. That started the clock ticking.The next business day, the Nam Tai CEO and Chairman of the Board Mr. Ying Chi Kwok, who happens to be the younger brother of the CEO of largest shareholder Kaisa Group Holdings (1638 HK), resigned "for personal reasons", effective immediately. A week later, Nam Tai named Dr Lai Ling Tam, to the role of Executive Chairman, and Mr Jiabiao Wang as CEO. Both are ex-Kaisa. So much for independence. In my previous insight Nam Tai Property - An Interesting Activist Situation which introduced the activist situation, I concluded by saying... ...where the company has just spent a lot of cash last quarter buying the Dongguan asset and now that cash is depleted, there could be a risk of a downturn so the company would need to raise cash by offering shares. A third-party placement to a strong development partner like Kaisa might be engineered. It is often the way of things. It is specifically what the activists and their supporters are trying to make sure does not happen. But they are right to be worried that it might.And so it did. I was trying to be gentle in my wording. It is not clear that I needed to be. Nam Tai Property Inc (NTP US) on 5 October announced pre-open that it had raised US$170mm through a private placement (PIPE) of common shares to Kaisa Group Holdings (1638 HK).There may be problems with this.  There may not be.More below the fold. 

Nam Tai Property - Equity Placement Is Awful Governance. Permanent Entrenchment Risk Exists.