Drew Peng

Committed to a fair outcome w/respect to the proposed privatisation of Bracell by the dominant, controlling shareholder. Informed opinions & comments welcome.

[Drew Peng @bracellfairness]

Revised proposal on 3 Aug 16 for #Bracell continues to undervalue the Company. Letter sent to IBC. #bracellfairness
https://t.co/S9JPJHt571

[Drew Peng @bracellfairness]

#Bracell indy shareholders attending this morning's SGM, vote your conscience after a clear consideration of the facts. #bracellfairness

[Drew Peng @bracellfairness]

#Bracell free cash flow of >$0.30/share/year through 2018; fundamentals improving rapidly; becomes debt-free in next 6 mos. #bracellfairness

[Drew Peng @bracellfairness]

.@CCFGroup data indicate strong VSF price ramp. Strong support 4 supply-constrained rayon-grade DWP #bracellfairness
https://t.co/HdTdjfzC5I

[Drew Peng @bracellfairness]

Reminder by Company of date and time of Court Meeting and SGM to vote for privatisation proposal. #BracellFairness https://t.co/jIdYYCFXSN

[Drew Peng @bracellfairness]

Importantly, multiple considerably below publicly-traded comps. RYAM not a sufficient comparison given its issues w/mkt share and pricing.

[Drew Peng @bracellfairness]

From my letter to Bracell IBC on 17th August, proposed valuation multiple of take-private is 4.9x LTM EBITDA.

[Drew Peng @bracellfairness]

Links to relevant proxy forms. Both must be received 28th Sept if not planning to attend. https://t.co/4EGpiGLOGz
https://t.co/cZiu0Y2QGM

[Drew Peng @bracellfairness]

Bracell Independent Shareholders: the time to vote by proxy is NOW. No electronic options, only traditional post.

[Drew Peng @bracellfairness]

Perhaps only issue Rothschild gets right in its recommendation to Bracell IBC:

[Drew Peng @bracellfairness]

10/ (cont'd) then gets implied acquisition multiple wrong anyways (it was 8.1x LTM).

[Drew Peng @bracellfairness]

10/ Rothschild refuses to acknowledge comparable precedent transaction GP-Buckeye, claims ignorance of synergies,

[Drew Peng @bracellfairness]

9/ Precedent trxns analysis is completely meaningless; none of the companies remotely comps except traded in HK.

[Drew Peng @bracellfairness]

8/ Then proceeds to show Bloomberg/IHS forecast showing continued BRL weakening against USD through 2018F.

[Drew Peng @bracellfairness]

7/ (cont'd) cites "high volatility of the exchange rate" as risk to Bracell margin profile.

[Drew Peng @bracellfairness]

7/ Rothschild overplays BRL weakness against USD as source of margin improvement in 1H 2016,

[Drew Peng @bracellfairness]

6/ Rothschild conveniently ignores value of Bracell unused tax losses in valuation analysis, up to NPV of $0.23/share.

[Drew Peng @bracellfairness]

5/ Also completely ignores that RYAM executed materially dilutive conv equity raise on 8/4/16, sending shares lower.

[Drew Peng @bracellfairness]

4/ Suggestion that RYAM is "most comparable" to Bracell is brazenly illogical; Bcell core growing stronger while that of RYAM under threat.

[Drew Peng @bracellfairness]

3/ Omits 1H CY16 results from comps analysis, suggests most recent results already reflected in respective sh price.

[Drew Peng @bracellfairness]

2/ Analysis is flawed, incomplete, and insulting. They should know this.