The potential the price adjustment or the abortion of the privatisation would mainly due to two reasons:

1. The offeror is taking advantage of the current situation to walk away or buy out ENG at a cheaper valuation. This will not happen if the offeror is genuine and serious investor as the assets are adequately covered by insurance and in the long run, the business would still be running as usual. Any downward price adjustment would definitely unfair to the offeree as no upward price adjustment would also be made for the expected 2011 profit to be earned by ENG which i believe, it will be the case at the point when the offer was made. In fact, the current situation works best for the offeror as all non-interested shareholders would definitely vote for the deal if the offer is tabled to them now.

The key question now is whether do you believe Dato Teh is a credible, gentleman and genuine offeror for his privitisation proposal. I personally believe so.How about you?

2. Funding. Obviously, the extension is to facilitate TYK's financier due diligence on ENG and not because of the flood as the extension was made before the unfortunate event. As in my first comment posted earlier, do you think the banker would walk away from the deal.

Yes, Thai operations contributed about 40% / RM230 mil revenue to ENG group's revenue in 2010. The numbers look scary but dont panic. Lets do a simple maths, assuming Thai contributions would be the same for year 2011 and on average, RM19 mil per month. Further assume that the factories in Thai would take 3 months to re-operate and thus, total loss of revenue would be RM57 mil (RM19 mil X 3). Based on the PAT margin of 4.5% (as per 2nd 2011 Qtr results), the revenue of RM57 mil would translates into about RM2.5 mil profit. Now, is the loss of the RM2.5 mil operation profit looks significant? hmm....it will be only about 10% if the full year 2011 profit is RM25 mil. In addition, the factory in Rojana (which already been badly hit) is smaller one compared to the factory in High Tech and just hope that the damage to High Tech would not be as severe as the one in Rojana. It would be a plus point if the Thai orders can be directed to Malaysia operations for the next 3 months while restoring the operations in Thai.

I do not assuming any loss of the machine for the above as all machine are adequately covered by insurance.

Do you think the numbers make sense?

Just pray hard that the flood would be not prolong and the affected areas would be recovered soon...

Good luck to all non-interested ENG shareholders....

As we believe Dato Teh is a genuine businessman, the key issue here now is really the funding to take ENG private. So, in my view, the most pertinent question need to be answered is that if you were the banker, would you still be funding TYK to take ENG private?...hopefully the flood is just a temporary setback to ENG's business as the factories will still be running as usual for the long term and on this basis, the banker will go ahead to fund the proposal...