Jaya: (S$0.031) Cash shell face delisting within three months
Jaya terminated a non-binding term sheet for a proposed acquisition of Indonesian agricultural planter Izzisen Global, leaving the company one step closer to a delisting.
To recap, Jaya sold its offshore services and shipbuilding operations to Mermaid Marine Asia in Apr '14, and subsequently received an arbitration claim from Mermaid of $15.6m for an alleged warranty breach in Dec '14.
As at Jul '15, Jaya had $18.1m in net assets, equivalent to 2.35¢/share. However, with the outstanding claim of $15.6m (2¢/share) which Jaya intends to contest, it remains to be seen if shareholders can recoup any capital back should the company be delisted.
Even if Jaya wins the case and makes a capital distribution, the current share price of 3.1¢ is way above its theoretical value.
On the other hand, if Jaya loses the claim and is required to bear the costs from the legal proceedings, the company may end up with only $2m (0.26¢/share), assuming legal costs of $0.5m.
The cash shell has until 3 Dec '15 to pursue other acquisitions, or face delisting.