NTUC China Hypermart venture lost up to $80 million?
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NTUC was supposed to look after the interests of ordinary workers. Now they keep incurring losses of people's monies in one venture overseas after another.
Who made the decisions? Who took away workers' monies and their monthly contributions of sweat monies and risked them in all these projects without transparency and accountability?
Will there be an independent panel to look into these losses and how to stop the breeding? Read OSPhttp://www.managefranchise.blogspot.com[/url] -
$80 over what time period from operations?
What was the size of the investment? -
It is not $80.00 but $80,000,000.00 - not a small sum by any standard.Originally posted by Salman:$80 over what time period from operations?
What was the size of the investment?
Not the size that matters. It is the principle. Do our NTUC leaders have principle or integrity? Do they follow some basic principles that so when they are taking charge of NTUC, they understand and practise good corporate governance and look after people's welfare and wellbeing. So far, they do not seem to open up or care about such good corporate governance or even look after the livelihood of workers as shown in such persistent overseas losses. Do they have to have so much power to become so arrogant and so frivolous with all such decisions. -
$80 does sound like a lot of money, but can you give us the details so that we can have a beter pciture?
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Hi Salman,Originally posted by Salman:$80 does sound like a lot of money, but can you give us the details so that we can have a beter pciture?
Merry X'mas and Happy New Year to You!
Do us and yourself a favour -- learn the facts first before shooting off your mouth.
From Business Times
Published December 24, 2005
FairPrice's China hypermart joint venture bows out
Rescue deal offered by FairPrice but parties couldn't agree on terms
(SINGAPORE) Nextmall, the China hypermarket venture of NTUC FairPrice, is shutting down after racking up nearly $80 million in debts and more than $40 million in losses over the three years since it was formed.
Nextmall's eight hypermarket properties are being sold, which should help with debt repayment.
NTUC FairPrice International is writing off the US$12 million it paid for its 33.7 per cent stake in Nextmall. DBS Nominees, understood to be representing DBS Private Equity, holds a similar stake.
The rest of Nextmall is held by China billionaire Liu Yonghao's New Hope Group, real estate developer Dahua, and Taiwanese entrepreneur Chang I-Chang, who owns the Apex group in Taiwan.
Nextmall provides merchandising, management and logistics services to China-incorporated hypermarket operator, Nextmart, for a fee.
'We went in as financial investors to get a feel of China, and secondly to establish our purchasing office in China, which we have done,' said FairPrice assistant general manager (investments) Victor Lim.
'We were not involved in the day-to-day operations of Nextmall which were done by a local management team. It overextended itself, developing too many hypermarkets in a short span of time. In addition, Nextmall also ventured into two mall developments.'
That was partly how Nextmall racked up its debts. Nextmall's management team is headed by Taiwanese Andrew Shen.
Nextmall owes suppliers $30 million; banks, including DBS's Shanghai branch, $40 million; and the developer of a Nanjing property, $6.6 million.
'FairPrice even offered a rescue package to assume the majority stake in Nextmall and take over the day-to-day running in order to reverse the losses, but we could not agree on the terms stipulated by the other shareholders,' said Mr Lim.
Nextmall owned the Nanjing store and took long term leases of about 15 to 20 years each for the other seven hypermarket stores and malls.
It has so far disposed of two stores to Carrefour - in Shanghai's Qipao district and in Nanjing. Nextmall has also assigned its long-term master lease in the mall where its Qipao hypermarket was located to Singapore's CapitaLand group.
Nextmall has also divested its hypermarket store in Yuyao in Zhejiang province. It is finalising a deal to find buyers to take over its master leases for a mall and store in Shanghai's Paoshan district and is in talks to sell three other hypermarket stores in Taizhuo, Shaoxing and Keqiao - all in Zhejiang. -
Dear obvious man,
Thanks for the article.
Please do all of us a favour by reading the thread before you shoot anything off.
I did not shoot anything at all, I simply asked for details.
The one who shoots off is Robert Teh, he claimed a loss of $80million whikle the article says only $40million.
Why don't you tell Robert Teh off for shooting off w/o learning the facts?
Merry Christmas -
a loss is a loss.
what difference does it make how big the investment was or how long it took?
you are always trying to rile people and defend the MIW blindly. -
Must pre-empt you mah!Originally posted by Salman:Dear obvious man,
Thanks for the article.
Please do all of us a favour by reading the thread before you shoot anything off.
I did not shoot anything at all, I simply asked for details.
The one who shoots off is Robert Teh, he claimed a loss of $80million whikle the article says only $40million.
Why don't you tell Robert Teh off for shooting off w/o learning the facts?
Merry Christmas
$40 million loss already realised, $80 million debt still unsettled.
You know what is debt? Rollover debt requires interest payments!
If the creditor is kind, they might write off some of the debt.
$80 million quite conservative (50% discount, kio tio liao!) -
'We went in as financial investors to get a feel of China, and secondly to establish our purchasing office in China, which we have done,' said FairPrice assistant general manager (investments) Victor Lim.
I don't see how establishing a purchasing office in China will cost millions of dollars.
As for financial investing, I think NTUC will be better off just buying shares of Carrefour. Carrefour is doing extremely well in China.
'We were not involved in the day-to-day operations of Nextmall which were done by a local management team. It overextended itself, developing too many hypermarkets in a short span of time. In addition, Nextmall also ventured into two mall developments.'
If this paragraph appears in straits times and not business times, it may fool many laymen without business degree or diploma. But good thing that it appeared in the biz times and I am sure many biz-educated readers had a great laugh on how NTUC define "operation".
Developing hypermarts, mall developments and leases of 15-20 years are not day-to-day operation issues but strategic decisions that a 33% shareholder can have influence on.
In terms of Taiji rating, I will give this a pathetic 3 points out of a maximum of 10.
NTUC should find a better Taiji reason. -
Loss is loss, debt is debt.Originally posted by ObviousMan:Must pre-empt you mah!
$40 million loss already realised, $80 million debt still unsettled.
You know what is debt? Rollover debt requires interest payments!
If the creditor is kind, they might write off some of the debt.
$80 million quite conservative (50% discount, kio tio liao!)
I think its more a matter of spinning and trying to put the debt as losses since it looks like a bigger figure.
Debts can be repaid after sales of good, only then can it be realised as loss.
Also, how can you assume debtor will write off 50%? Can you let me know who will do that? wy don't we go borrow money from these lenders?
You see, once again I showed that all of you don't know what you are talking about. -
NTUC writing off US$12million. In this case, i think its more of failure to understand how overseas partners work. In short , NTUC Is small fry in this many shareholder arrangment, so cannot make decsision or even control or get to see the original accounts instead of modified one.Originally posted by ObviousMan:[NTUC FairPrice International is writing off the US$12 million it paid for its 33.7 per cent stake in Nextmall. DBS Nominees, understood to be representing DBS Private Equity, holds a similar stake.
The rest of Nextmall is held by China billionaire Liu Yonghao's New Hope Group, real estate developer Dahua, and Taiwanese entrepreneur Chang I-Chang, who owns the Apex group in Taiwan.
This is how many companies, GLC or private companies, loss money and get cheated in china and india.
And the main cause is one dishonest partners sucking money from the venture, thru some links. I have many friends in many situations and also many public listed companies also fall into this trap.
This should be a lesson to them when venturing overseas, there are no short cuts and doing business in china has a lot of human complexities for personal gain rather than business contract fulfilment. Same situation as malaysia and indonesia. -
i am not sure it could be a trick by two or more partners, to force more partners to write off. The remaining few good friends will restructure the hypermark as their own, injecting a little of their own money, to substain cash flow operation till debts repay.
This scheme is very common in business venture risk to get rid of partners after sucking their invested millions. -
Originally posted by AF2005:i am not sure it could be a trick by two or more partners, to force more partners to write off. The remaining few good friends will restructure the hypermark as their own, injecting a little of their own money, to substain cash flow operation till debts repay.
This scheme is very common in business venture risk to get rid of partners after sucking their invested millions.'FairPrice even offered a rescue package to assume the majority stake in Nextmall and take over the day-to-day running in order to reverse the losses, but we could not agree on the terms stipulated by the other shareholders,' said Mr Lim.
guess NTUC Fair Price got off to a bad start in the first place by placing too much trust on its partners. -
Networking in China is still very controlled, where a few local honchos hold the difference bewteen success and loss.
In that sense, business in China is still very primitive. Business models are useless and strategic planners cannot predict sales and marketing in such an environment. The protectionism is very much alive despite the WTO's demand for China's economy to open up.
NTUC's loss will be written off as yet another expensive tuition loan. -
Another thing is their method here dun work there, over here the govt make ways to make sure NTUC holds monopoly...
Over there, you are on your own -
Buay Tahan. Salman, why you so like dat one?Originally posted by Salman:Loss is loss, debt is debt.
I think its more a matter of spinning and trying to put the debt as losses since it looks like a bigger figure.
Debts can be repaid after sales of good, only then can it be realised as loss.
Also, how can you assume debtor will write off 50%? Can you let me know who will do that? wy don't we go borrow money from these lenders?
You see, once again I showed that all of you don't know what you are talking about.
Everytime mambo jambo para para sakura anyhow whack!
Tell u upfront liao, you keep on doing that.
You sure you understand what you type?
Debtor / creditor don't anyhow mix up.
When a company incurs a debt, money is owed to a creditor. Normally, a company will have many business partners / suppliers who is owed money. If the debtor is cash-strapped, creditors can choose to write off some loans so as to recover a portion from the debtor simply because partial payment is better than no payment (should the debtor be bankrupt).
To be honest, NTUC is nowhere near bankruptcy. If they cannot pay, some outlets in Singapore can be possesed by the creditors to be run by them or sold to recover their loans. So the 50% write-off by creditors is very optimistic but unrealistic (as you pointed out). Most likely, NTUC have to pay in full. The full potential loss is $80m in debt + $40m loss + interest payments on debts.
True, sale of assets can reduce the loss somewhat. But merchandise sold under liquidation conditions fetch poor prices. Then you have to pay legal fees, rent, labour,suppliers, etc. By then, how much is left?
Not going to argue with you on the figures.
You want to insist loss is $40m, also can.
You tell me $40m SGD convert to Chinese yuan can buy what in China?
Don't answer also never mind lah.
Can anyone tell me what is the mission statement of NTUC?
WTF were they doing in China? -
Are you saying that NTUC mission says cannot explore China market?
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indeed, what the GM of NTUC said to business times is a joke to all those who know business. how can millions be invested in a business especially with NTUC specialty and it doesnt get involves in day to day operations? are NTUC jumping into supposely rich bandwagon without doing propoer research.
guess what, these so call top executives head will not be roll. only the ppl that paid for their subscription fees are being cheated.
by the way, is this reported on the channel news asia?? or any news channel? because i dont heard about it. -
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wait...how much did NTUC actually lose? Debts is one thing, liability is another. YOu do not neccessarikly have to pay off your debts. How much are they liable to pay? Anyone knows?
edit: excuse the spelling...can't be bothered. And grammar -
$80M in lossesOriginally posted by lwflee:wait...how much did NTUC actually lose? Debts is one thing, liability is another. YOu do not neccessarikly have to pay off your debts. How much are they liable to pay? Anyone knows?
edit: excuse the spelling...can't be bothered. And grammar
Reason why it is not on CNA or whatever is because they never dare to say they loss all this money.
Anyway, NTUC is a Co-operative to serve the ppl, not to what they say of making decent profits... Even so, out of bus co, rail operators, TV stn, they make the most profit -
Is NTUC in the bus, rail and TV station business? -
uOriginally posted by Ito_^: at Mr "know all" Salman or NTUC? -
Even if it is not, all these are considered Utilities to the pplOriginally posted by Salman:Is NTUC in the bus, rail and TV station business? -
Oh. $80million in debt is not a loss?Originally posted by Salman:Dear obvious man,
Thanks for the article.
Please do all of us a favour by reading the thread before you shoot anything off.
I did not shoot anything at all, I simply asked for details.
The one who shoots off is Robert Teh, he claimed a loss of $80million whikle the article says only $40million.
Why don't you tell Robert Teh off for shooting off w/o learning the facts?
Merry Christmas