Thursday, June 14, 2012

Yangzijiang Shipbuilding : Why weren’t investors informed about this donation earlier?

Chairman donates 27.83% equity stake in the group

[6/13/12] – Yangzijiang Shipbuilding’s founding Chairman, Mr Ren Yuanlin, has donated US$750 mln worth of his stocks in the group to Yuanlin Charity Foundation which helps senior citizens in China.

According to a report in Irish Times, Mr Ren Yuanlin gave away 27.83% equity stake in the company in March this year.

The report quotes the Chairman saying, “in China there is the one-child policy. All the babies are much loved by their parents. But eventually society will become old and there will be a lot of problems because [each of] those one child children will have to look after two old people.”

This event is of significant importance to the shareholders of Yangzijiang Shipbuilding as it remains unclear if Mr. Ren will continue to serve as the Chairman and more importantly, when and how will the Yuanlin Charity Foundation monetise these shares?

The sale of these shares in open market will have a major impact on the stock price.

Also, the buyer(s) of this large equity will call the shots at the group.

Many investors would also question if this was the right time to make such a philanthropic decision, given the global economic scenario?

According to Wealth-X’s intelligence, the 27.83% stake is worth US$775 mln at S$1 per share.

This represents 89% of Mr. Ren Yuanlin’s entire wealth and after this donation his net worth falls to US$95 mln only, adds Wealth-X.

In 2011, Mr. Ren Yuanlin was ranked 84th in Forbes Billionaires list for China with US$1.1 bln net worth.

The Forbes website also says that he has applied for ‘Hong Kong abode’.

Investor Central. We ask the questions that need to be asked:
1. Mr. Ren Yuanlin has surprised everyone on the street by his philanthropy. More surprising is the secrecy about the deed which is a big development (might be biggest after the IPO) for the shareholders of the group. And this is the question haunting every mind, why weren’t the investors informed about this deed earlier? Why did it take a news report in Irish Times to reveal all?

2. Yuanlin Charity Foundation will certainly liquidate the equity investment as and when it needs. The bigger concern is the impact of any such move on the stock price and consequently, shareholders. Has Mr Ren signed any agreement to this effect?

Source/Extract/Excerpts/来源/转贴/摘录: InvestorCentral
Publish date: 13/06/12

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