Ocean Sky

Ocean Sky: Possible positive sentiments after grp announced that it has entered into a conditional sale and purchase agreement with HK listed Luen Thai Holdings to acquire all of the issued share capital, together with all rights, dividends, benefits and entitlements attaching thereto, of its apparel operations business/subsidiary, Ocean Sky Global (S) for US$55m. Ocean Sky intends to, subject to prevailing market conditions, pay a special div of $0.016 / share (9.3% yield), amounting to approximately US$5.8m in aggregate upon the completion of the proposed disposal. The purchase consideration of US$55m represents a premium of approximately 37.5% to OSG’s NTA of US$40m (post-restructuring) and a P/E of approximately 6.3x to OSG’s FY11 earnings. Grp note by unlocking the value of its apparel operations business at a good price, they now have the resources to expand and invest in new opportunities, which could potentially generate higher returns to our shareholders on a more sustained basis.