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There is a saying in Chinese :-
You owe someone $$, you are emperor and on the other hand, someone owe you $$, you are a begger, keep stretching out your hand to ask for the return of $$. Thus, now $$ is in their pocket, it is difficult to ask back for $$ ! Have more patience, CNY is a long holiday in China.
why is CM doing such thing?
isn't all these very bad on their biz?
Looking very bad. 2 key pts made by Cmilk management that shareholders should read again:
1. Company has NOT yet made formal application to SAFE (China Authorities) for approval to remit funds. (Mgt initially gave the impression that delay was caused by Authorities when in fact no formal application was ever made.)
2. Company's ability to operate as a going concern is in doubt! (Is it fake cash balance like SinoEnv, China fibrechem etc ?)
(THE “SGX-ST”) ANNOUNCEMENT DATED 12 FEBRUARY 2010 RELATING TO
EARLY REDEMPTION OF US$150,000,000 ZERO COUPON CONVERTIBLE
BONDS DUE 2012 (THE “BONDS”) OF CHINA MILK PRODUCTS LIMITED (
“CHINA MILK” OR THE “COMPANY”)
We refer to the announcement released by SGX-ST on 12 February 2010 in relation to the
early redemption of the Convertible Bonds (the “Early Redemption”) of the Company. The
Company’s responses are set out as follows:
SGX-ST Queries Part A:
Cash Position and Status of State Administration of Foreign Exchange (The
“SAFE”) Application
SGX-ST Query A (i):
Please clarify if the Company has sufficient funds in its bank accounts for the
bond repayment should SAFE approval for the remittance of funds out of the
PRC be obtained.
Management has represented to the Directors that the Company has sufficient funds in its
bank accounts to meet the Bonds’ obligation. To this end and in due course, the Board
intends to independently affirm this position.
SGX-ST Query A (ii):
Please confirm when the application to SAFE was made, and to which branch of
SAFE the application was made. Please also disclose the reasons for the delay in
obtaining SAFE clearance, and what the Board is and will be doing to follow up
with SAFE on this matter.
Management has advised the Directors that it has not made any formal application in writing
to the SAFE for the approval of remittance of funds out of the PRC. However, the
management had initiated discussions with SAFE officials on the proposed repatriation of
funds out of China. Management has advised that there are various procedural obstacles that
must be overcome before formal approval can be forthcoming. The Board intends to engage
PRC legal counsel to assist with the formal SAFE application procedures and to determine the
reasons for the delay in obtaining SAFE clearance.
SGX-ST Query A (iii):
In view of the bond default and the inability of the Company to meet its short
term obligations, please disclose the Board's views on whether the Company is
able to operate as a going concern, stating clearly the basis for the Board's views.
If the Board is unable to determine the Company's state of affairs, please also
explain why.
As the Company is in default of its payment obligations pursuant to the Early Redemption
under the terms and conditions of the Bonds, the Company has not been able to pay its
liabilities as and when they fall due. Notwithstanding its current financial position,
technically, the Company’s ability to operate as a going concern may be in doubt.
The Board is working with the Management to complete their latest quarterly results
announcement and will release the same when they are finalised.
SGX-ST Queries Part B: State of Affairs
SGX-ST Query B (i):
In view of the recent developments, please also provide an update on the status of
the Company's operations.
Management has informed the Board that the Group’s subsidiaries in the PRC are still
operating as usual. However, due to the Chinese New Year (“CNY”) period, there is
currently a lull in operations due to the CNY festivities, which is typical for most businesses
in the PRC at this time of the year. The Group expects that normal operations to resume in
late February 2010.
As reflected by the past financial results announcements, the Group’s sales and profit have
been adversely affected due to the effects of the financial crisis as well as the melamine milk
scandal in the dairy industry in the PRC.
SGX-ST Query B (ii):
Please provide the specific steps the Board intends to take to address the
Company's operations, state of affairs and going concern status, and the
respective timelines.
Management has assured the Board that they will continue to manage its business to preserve
sales and assets. The Board will ascertain and try to resolve the various issues surrounding
the Company’s inability to meet its Early Redemption obligations and to work with
bondholders to arrive at an amicable settlement.
As the Board feels that there are many variables at this stage, and which is compounded by
the absence of a Chief Financial Officer (“CFO”), the Board is not be able to provide any
realistic timelines to resolve the various issues affecting the Group.
Replacement of CFO
As the resignation of the Company’s CFO was abrupt, the Company has yet to appoint a
replacement. Efforts will be made to recruit a suitable candidate as a replacement.
The Board recognises the severity of the recent developments arising from the Early
Redemption. Given the recent changes to certain key appointment holders within the
Company and the coincidental timing of the CNY period, the Board will need additional time
to ascertain the ongoing status and to resolve the various issues as noted in this
announcement.
Appointment of External Advisers
The Board reiterates that the Company, has to date, not appointed any legal or financial
adviser(s) to represent the Company in its discussion or negotiation with any bondholders in
connection with issues relating to or in connection with the Early Redemption (“Redemption
Issues”'). The Board shall make a formal announcement to update the investing public and all
stakeholders, if and when such an appointment is made. Meanwhile, the Board shall be the
exclusive authority in dealing with the Redemption Issues.
Announcements will be made from time to time where appropriate, to update the
investing public and all stakeholders. Meanwhile, shareholders and potential investors
are strongly advised to exercise caution when dealing with the shares of the Company,
particularly, in view of the present inability of the Company to meet its payment
obligations under the Early Redemption.
When in doubt, shareholders and potential investors are advised to seek independent
advice from their bankers, stockbrokers, solicitors or other professional advisers.
CHINA MILK PRODUCTS GROUP LIMITED
LIU HAILONG
CHIEF EXECUTIVE OFFICER
22 February 2010
DELAY IN THE RELEASE OF THE UNAUDITED THIRD QUARTER AND NINE
MONTHS FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR
THE YEAR ENDING 31 MARCH 2010
We refer to the announcements released by China Milk Products Group Limited (the
"Company")
Company’s Convertible Bonds.
on 5 January 2009 and 12 February in relation to the early redemption of theUnaudited third quarter and nine months financial statements and dividend
announcement for the year ending 31 march 2010
In view of the current circumstances, the Board of Directors (the "
update Shareholders that the Company may not be able to release its unaudited third quarter
and nine months financial statements and dividend announcement for the year ending 31
march 2010 (“
announcement of interim financial results as stated in the Listing Manual of the Singapore
Exchange Securities Trading Limited (“
Accordingly, the Company has applied to the SGX-ST for an extension of time (up to an
additional 30 days) for the release of the Q3 Financial Statements, on the following grounds:
1.
Board") would like toQ3 Financial Statements”) before 15 February 2010, being the deadline forSGX-ST”).Absence of a Chief Financial Officer1.1 As announced on 1 February 2010, the former Chief Financial Officer ("
the Company, Mr. Martin Choi, had resigned from the Company with effect from 31
January 2010. While the Chief Executive Officer of the Company, Mr. Liu Hai Long,
has assured the Audit Committee that the Finance Department of the Company is
functioning as usual and has accordingly prepared the Q3 Financial Results for
release, the Audit Committee notes that the same has not been previously reviewed
by the former CFO or someone familiar with the international financial reporting
standards. The rather abrupt departure of the former CFO and at a time when it is so
close to the Q3 Financial Results announcement deadline did not allow the Company
to have sufficient time to engage a replacement CFO or to arrange for alternative
reviews of the Q3 Financial Results.
2.
CFO") ofReconstituted Audit Committee requires additional time to review2.1 As announced earlier, Mr Sum Yee Loong (“
the Company and Chairman of the Audit Committee, had also resigned from the
Company. The Board of Directors of the Company has since, on the recommendation
of the Nominating Committee, appointed Mr Lai Seng Kwoon (“
Board of Directors as an Independent Director. Following this, the Audit Committee,
Nominating Committee and Remuneration Committee have each been reconstituted,
with Mr Lai taking over the positions vacated by Mr Sum.
2.2 In view of the reconstitution of the Audit Committee and the Board and in the light of
the current circumstances of the Company (including the absence of a CFO and the
Company's inability to meet its obligations arising from the early redemption of its
Convertible Bonds), the reconstituted Audit Committee would require more time to
fully understand the financial affairs of the Company to enable the Board to provide
the necessary negative assurance on the Q3 Financial Results.
2.3 The Independent Directors have further noted that the Management of the Company
could not now give an unequivocal confirmation as to whether, when and how the
Company will be meeting its payment obligations under the Convertible Bonds when
the earlier impressions given to the Board was that the Company is in a position to do
so save for some procedural matters. This fortifies the Audit Committee's resolve to
approach the Management's representations on the Company's financial position with
more caution to ensure that the Q3 Financial Results when announced are not
inaccurate or misleading in any way.
Mr Sum”), an Independent Director ofMr Lai”) to theOn-going Discussions with Management
The Independent Directors of the Company wish to state that they are extremely concerned
over the state of affairs and the unexpected developments. They are and have been in
discussions with the Management to be apprised of the latest developments and affairs of the
Company, with a view to updating Shareholders as and when appropriate. However, given the
Chinese New Year holidays, some delay in response is expected.
Suspension of Trading
In view of the current circumstances, including the Company’s delay in the release of the Q3
Financial Statements, the Board of Directors is of the view that it would be prudent not to
request for a lifting of the trading halt and instead to suspend trading of the Company's shares
for the time being.
We will provide further updates via announcements, as and when appropriate.
Shareholders and potential investors are strongly advised to exercise caution when
dealing with the shares of the Company, particularly, in view of the default by the
Company in meeting its payment obligations under the Convertible Bonds on time.
When in doubt, Shareholders and potential investors are advised to seek independent
advice from their bankers, stockbrokers, solicitors or other professional advisers.
CHINA MILK PRODUCTS GROUP LIMITED
LIU HAILONG
CHIEF EXECUTIVE OFFICER
12 February 2010
ianong ( Date: 21-Feb-2010 08:48) Posted:
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Why hasn't CM replied to SGX on the query? No time limit?
actually TA was already showing signs of sudden weakness but a sudden push last 2 months bluff a lot of gullible FA investors because of its profit last few years.
Some more it was one of the first few S chip to redeem CB last year. And the last thing to have bust it now is CB.
Seems investing in S chip needs not jusr TA, FA, MA but lot of luck and monitoring.
Think only S chip worth considering in entire SGX is Yanlord but again price too high for me.
tanstg ( Date: 18-Feb-2010 17:02) Posted:
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Always be alerted if the CFO starts leaving the trouble company....how? check www.sgx.com site daily if possible.
how much u bought at?
I bought at an average of around .33.
already loss quite a bit although qty is not big.
:(
Jackpot2010 ( Date: 18-Feb-2010 10:14) Posted:
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1. Trading halt - cannot exceed 3 market days.
2. Suspension - if no resumption proposal submitted to SGX within 12 months from date of suspension, then it will be DELISTED.
3. Delisted - dead meat/rotten milk to shareholders (if no cash balance).
I hv divested few wks b4 trading halt.
alanalanlee ( Date: 17-Feb-2010 21:50) Posted:
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is there a period of being in suspend?
gone case liao...
That was one of my questions with regards to CM. Even if they had so much cash, why borrow US$150 million but not spend a dime of it ???
This applies to all companies - If you company reports huge profits and piles most of them up in the Treasury, you have to be worried. Companies generally retain their earnings for acquisitions and working capital. This is normal. It isn't normal for a company to keep a lot of cash in the bank for no reason. A company which makes a lot of earnings and have low capex, should distribute at least 40% of their earnings back to shareholders.
gregorsamsa ( Date: 16-Feb-2010 20:31) Posted:
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