New SGD Issue Warning : Hankore Environment Tech Group Ltd (amended)

July 25 (Bloomberg) — Person familiar with the matter
Issuer: HanKore Environment Tech Group Ltd.
Tenor: 2-yr
Initial Price Guidance: 7.5% area
Timing: Expected this week’s business, as early as today
Sale Manager: DBS
Format: Reg S S274 & 275 of Singapore SFA off SGD300 million
Ranking: Direct, unconditional, and unsubordinated
Person asked not to be identified because the terms aren’t set

Penny stocks coming out for a share of the pie. This company is the former Bio-Treat Group.

Warning : The company had issued and defaulted on their convertible bonds ! (READ THE OFFERING CIRCULAR)

Volatile earnings stream. 1 year up, 1 year down.

Recap Pretax Income.

06/2012 +104.13 mio
06/2011 -408.94 mio
06/2010 +224.22 mio
06/2009 -703.34 mio

Market cap is SGD 249 mio. MTN Programme size is SGD 300 mio.

Change of Shareholding:  Change of Shareholding Event Put at 101% upon Chairman ceasing to be single largest shareholder
Financial Covenants:
(i) Consolidated Tangible Net Worth ≥                                       RMB1,200,000,000;
(ii) Consolidated Net Borrowings to Consolidated                                Tangible Net Worth ≤ 1.5:1
(iii) Consolidated Secured Debt to Consolidated Total Assets ≤ 0.5:1.
Interest Reserve Account:Six months interest in reserve, in addition to pre-funded interest payment at least 3 months prior to each payment date

Note the hefty number of covenants which have to be kept but there is no restriction on any FUTURE CONSENT SOLICITATIONS that we have been seeing in the market for Aspial, Hyflux and PCRT !!

How amazing that the order books are now 50 million.

Yet it is a case of willing buyer and willing seller.

I do not understand how this bond could be any better than Swiber (12.5%)  or Ezra (11.42%) perpetual.

With that, I rest my case.