Letter to SVI’s Investor Relations officer.
Dear Ms. Jang,
Thank you for your response below; I thought I answer back to you directly for speed, clarity and convenience.
However, our understanding is that H & Q terminated this fund, after its 10 year life span expired and this is why H & Q is selling down its ownership.
But the below response does not confirm this at all -and so its only more confusing.
If H & Q is doing as you suggest (and seem to have no control over), then investors will not look upon this favorably. As its shows a big supply of shares which could hit SVI on the sell side anytime. I ask you, what investors wants to "swim upstream" to such a large shareholder selling into the market anytime ?
Your stock price has been stagnant for many months and commands one of the lowest p/e ratio in the sector, all despite very good Q. profit reports this year. Please ask yourself why this is? I think it will continue to be so until your company clarifies what H & Q's true status is on their huge holding.
In some Thai news reports last week I saw a line somewhere saying that your company is asking H & Q to no longer sell in the open market, but place a block of shares directly to a large investor. I don't know if SVI made this comment, but surely that would be very desirable. Surely Thai & some foreign investors are keenly aware of this contentious issue.
As of now the uncertainty of H & Q future ownership plans of your stock and the further confusion of your response, seemingly to contradict that this fund must close, is only adding more uncertainty to us stock investors, or potential investors. Thai's and foreigners alike.
Thank you for your further clarification on this important key issue, also thank you for the answer on the other question well understood.
Best Regards,
Paul A. Renaud.
Here is how I initially wrote them:
We hear with regret that our meeting with SVI was canceled. This is now the3rd time this year we tried to see this company, unsuccessfully.
Anyway, we must accept this and move on, as there are so many othercompanies to consider. One of the key questions I had for SVI, and I would be great full if youcan forward this to them, is their relationship with H & Q, as they are thesingle largest shareholder, owning 60%. SVI has stated that thisshareholder wants to reduce their ownership of SVI to I think 50%. Arethey doing this now? Are they dribbling shares out on the open market?
What is the time frame, and why are they selling down if the SVI prospectsare so good and better then the market tought months ago?
The second question is: does SVI 's products in any way directly orindirectly, form or shape go (end up) to in financial services industry?As, no question, the globally broad financial services industry is by farthe biggest users of IT, software and hardware of so many kind. Ingeneral, what percentage of their products end up in USA?
Thank you & Best Regards,Paul Renaud.Thaistocks.com
And here is how she Ms responded a few days later:Here are answers to Mr. Paul's questions:
- H&Q is a leading private equity firm that has its central objective toachieve superior rates of return on its clients’ invested capital. Ittakes a long-term investment approach with its portfolio companies. Thefund has been holding SVI for about 10 years and to sell out part of SVIshares is to meet its objective.
- It used to be a news early this year that H&Q will reduce its ownershipin SVI to 51%. However, this has to be a decision made by them, not SVI. Whether or not or when to do this, SVI has no info at the moment. Thisquestion should be raised to H&Q directly. If you'd like, here is itswebsite: http://www.hqap.com/.
- Re SVI's products, we focus on hi-end niche market with most customersare in Scandinavian region, not in USA. The US market is very highcompetitive compared to Europe's. SVI has to grow much more, in terms ofrevenue size, in order to consider competing in the US market. Plus, wehave long-term, good relationship with customers in Scan. We also have apolicy to maintain each customer not to exceed 25% of our revenue.
- Attached is our recent 3Q07 presentation made for analysts which may helpyou understand SVI better.
Rgds,
JANGLakpilai Worasaphya
Investor Relations Manager
SVI Public Company Limited
