Sinwa Limited last month (Nov) announced an agreement to sell its businesses for S$74,865,000 cash, leaving it a "cash company" (ie, a listed shell).

The six sale subsidiaries are in marine offshore supply and logistics, serving more than 100 ports from 10 offices located in Singapore, China, Australia and Thailand.

Subject to shareholders' approval at an upcoming EGM, the transaction will mark the end of life for Sinwa as we know it.

As the story winds up, we wonder: How much would investors have made by journeying with Sinwa?


1. Start of life as a listco: Sinwa listed on the SGX on 28 February 2003. The IPO price was 23 cents.

MikeSim t 6.2016Mike Sim, 74, executive chairman, owns about 41% of Sinwa. NextInsight file photoThat may give the impression that Sinwa has been a sorry performer as its stock currently trades at around 26 cents.

But it had a bonus issue and a rights issue, and its dividends through the years make up for the lack of capital appreciation for long-term holders (more on this below).

The market cap at IPO was $28.75 million on a share capital of 125 million. Today, the figures are $90 million and 341 million shares, respectively.

2. Steady dividends: Sinwa paid dividends every year except 2011.

How much would an investor holding Sinwa shares from IPO till today would have collected?

Let's assume he bought 10,000 shares for $2,300 -- and he received 5,000 bonus shares subsequently.

Then in the one and only rights issue Sinwa called for, in 2010, he subscribed fully for his entitlement.

 

It was a 1-for-2 rights issue at 13.8 cents, costing him $1,035 to exercise 7,500 rights.

Thus his investment totalled $3,335.

And he owned 10,000 (original) + 5,000 (arising from a bonus issue) + 7,500 (rights issue) = 22,500 shares.

Using data from the SGX website, we worked out that the dividends he would have collected total $4,346. 

His shares can fetch 26 cents apiece in the open market currently for a total of $5,850 (ie 22,500 shares x 26 cent).

In all, he would reap $5,850 + $4,346 = $10,196.

So, after (nearly) 16 years, the gain is 206% (without accounting for the time value of money), or an average of 12.9% per year.

 

Still holding today

Sold at 63-c peak in Jan 2007

Sold at 6.2-c low in Oct 2008

Capital invested since IPO (incl rights issue, if any)

$3,335

$2,300

$2,300

No. of shares (incl bonus, etc)

22,500

15,000

15,000

i) Share value

$5,850

$9,450

$930

ii) Dividends

$4,346

$600

$618

Total (i + ii)

$10,196

$10,050

$1,548

% gain

206%

337%

-33%


3. Best return: Ah, what if the investor had cashed out at the peak of the share price of 63 cents in Jan 2007?  

Then his return would be 15,000 shares x 63 cents apiece + $600 dividends = $10,050.

As his original investment was $2,300 (and he had cashed out before the rights issue in 2010), his return was 337% (over 4 years).

Certainly, that would be great timing -- but that's on hindsight. 

4. And the worst timing? Oct 2008, amid the global financial crisis, when the share price traded at 6.2 cents.

He would have gotten back $15,000 shares x 6.2 cents apiece + $618 dividends =  $1,548.

That would be a loss of 33% after 5 years.

 

The purchaser of Sinwa's businesses is Asia Ship Chandlery Holdings Pte. Ltd, a special purpose vehicle created for this transaction.

It will be capitalised jointly by affiliates of SYZ Capital AG and Mr Thomas Zimmerhaeckel, a private equity investor and a director of Asia Ship Chandlery.

SYZ is a private markets investment and advisory specialist offering access to investments in private equity, private debt and real estate. SYZ is an affiliate of SYZ Group, a family-owned banking group based in Switzerland.

The Purchaser is not in any way related to the Sinwa Group, the Directors or any of its substantial shareholders.

• For details of the transaction, see Sinwa's announcement here

• 
For investor discussion on Sinwa, see Valuebuddies.com

 
watchnowAnalysts and investors visit Sinwa's new warehouse:


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