CitySpring net loss 16 times of IPO projection
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Business Times - 14 May 2007
CitySpring net loss 16 times of IPO projection
By CONRAD TAN
CITYSPRING Infrastructure Trust, which is backed by Temasek Holdings, yesterday announced a net loss of $56.1 million for the seven weeks to end-March, more than 16 times the projected sum at the time of its listing.
Revenue of $34.3 million for the period from its Feb 12 listing to March 31 was eclipsed by expenses of $100.4 million, which included $63.4 million in management fees.
This gave rise to a net loss attributable to unitholders of $56.1 million. In its listing prospectus, CitySpring had projected a net loss of $3.4 million for the two months from Feb 1 to March 31 and management fees of just $566,000.
The actual amount paid to the trust's manager comprised both a performance fee and base fee. CitySpring said that no performance fee was included in the projection at the time of listing, while the base fee projection was based on the minimum pro-rated base fee of $3.5 million per year.
According to CitySpring's prospectus, the performance fee is 20 per cent of the total return on its units above the total return on the MSCI Asia-Pacific ex-Japan Utilities Index for each quarter. Since CitySpring's unit price rose from 89 cents at listing to $1.49 at end-March, while the benchmark index fell 4.5 per cent, the units were deemed to have outperformed the benchmark by 74.3 per cent over the period, resulting in the large performance fee payout.
Temasek is the single largest unitholder, with a stake of over 20 per cent. CitySpring owns City Gas Trust and 70 per cent of SingSpring Trust, owner of the only large-scale seawater desalination plant here.
It will pay a distribution per unit (DPU) of 0.78 of a cent in June for the period ended March 31 and reaffirmed its DPU projection of six cents for the year to March 31, 2008.
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Is this good news or bad news?
Any financial gurus here? -
the stock price dropped like mad. but rebounded a little. lol
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A "transparent" financial centre would call for an investigation immediately to see if the IPO beneficiaries by "fraud" and "cheating" understated the expected "net loss" in the prospectus.
They would want to scrutinise how the projection was derived at in the IPO prospectus and if the beneficiaries deliberately attempted to mislead, cheat, or it was "an honest mistake".
Even if it were "an honest mistake" steps would be taken to punish those that made "the honest mistake".
Unless they announce an investigation... I ... -
got to ask.. wtf is the management fees still payable if the management didn't manage well enough?
but seriously... when revenue is about half of management fees alarm bells should be going off like mad..
and wtf is Temasek doing there?
maybe it's a strategic resource that Temasek is holding.. that may explain why.. but the management should be fired for world class incompetenceOriginally posted by googoomuck:Revenue of $34.3 million for the period from its Feb 12 listing to March 31 was eclipsed by expenses of $100.4 million, which included $63.4 million in management fees. -
btw.. this smells of a rat too
projection of 2 months of management fee is $566,000
that should amount to a year's fee of $3,396,000
so, where did that $63,400,000 come from?
that's 18.7 times of the projection!
say the projection is right since there is no performance fee and there was a base fee.. that would mean that the $3,396,000 is correct... that leaves $60,004,000 unaccounted for...
there's a pro-rated 'performance bonus' of minimum $3,500,000 per year... since they've performed really badly, let's pay them the minimum... which means $60m divided by $3.5m = 17 times
uhh.. has the management worked 17 years in that one year??Originally posted by googoomuck:This gave rise to a net loss attributable to unitholders of $56.1 million. In its listing prospectus, CitySpring had projected a net loss of $3.4 million for the two months from Feb 1 to March 31 and management fees of just $566,000.
The actual amount paid to the trust's manager comprised both a performance fee and base fee. CitySpring said that no performance fee was included in the projection at the time of listing, while the base fee projection was based on the minimum pro-rated base fee of $3.5 million per year. -
to small time investors relying on prospectus in IPO or audited financial accounts to make decisions, this is a "cover up" by the business to "blind" them. I think the auditor should also be answerable to the "hindsight"
furthermore the brand name "Temasek" as a major shareholder give rise to the "confidence" the the business is well manage. perhap Temasek spokeperson may also want to provide answers to the investors -
maybe it's the management style of the PM's husband again..
remember Shincorp and Micropolis?Originally posted by SevenEleven:to small time investors relying on prospectus in IPO or audited financial accounts to make decisions, this is a "cover up" by the business to "blind" them. I think the auditor should also be answerable to the "hindsight"
furthermore the brand name "Temasek" as a major shareholder give rise to the "confidence" the the business is well manage. perhap Temasek spokeperson may also want to provide answers to the investors -
$56M compare to $6B, ayai you ppl never see a lare python peeingOriginally posted by the Bear:maybe it's the management style of the PM's husband again..
remember Shincorp and Micropolis? -
I like that phrase "PM's husband"Originally posted by the Bear:maybe it's the management style of the PM's husband again..
remember Shincorp and Micropolis? -
It sounds like a repeat of the SingTel shares if you ask me.
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The PM's husband is very consistent in his performance (consistently bad, that is)
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It went into loss cos the management gets first claim to your hard-earned money.
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Shin Corp turns to loss in Q1, followed by Board shakeup.
http://www.bangkokpost.net/Business/16May2007_biz31.php