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Gold/Mining/Energy : TS TELECOM (www.tstelecom.com): ASPIRING TELECO
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To: geoff-t who wrote (880)11/18/1999 10:27:00 PM
From: M. Merriam  Read Replies (2) of 1762
 
Geoff, A few observations and comments:

1. The subsidiary of TOM has been approved for listing with Hongkong's GEM (Growth Enterprises Market) board, a NASDAQ-like exchange. Its stock number is 8003.

Just checked the GEM website. It does not list TOM subsidiary among approved companies:

hkgem.com

2. It has finalized or in the final stages of raising HK$97 million through an IPO for 30% of the company. This gives a valuation of HK$323 million or roughly Can$65 million for the subsidiary.

3. TOM should worth at least this much since it owns 100% of this subsidiary. Based on roughly 20 million shares outstanding, TOM's shares should worth at least $3.25 a piece.

Assuming that your figure of HK$97 m is correct for 30% of company, that would leave TOM owning the remaining 70% of the HK$323 m subsidiary, not 100%. Thus, TOM would hold CAN$2.28 of assets, not CAN$3.25.

Holding companies usually trade at a discount when the operating company is publicly listed. Given your figures, I would expect TOM to be trading somewhere between 50-70% of the $2.28 figure.

Question: Will TOM have any significant assets other than its ownership of this subsidiary? If so, that would affect the value.

Comments or corrections anyone?

Mike

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