Falling Knife of the Week: United Fiber System

UFS logo united fiber A company active in forestry, pulp, construction and property development, United Fiber System Limited (SGX: P30) fell 13.6% so far to close at $0.019 on Thursday. It is our Falling Knife of the Week.

Under the Forestry & Pulp division, the company owns and operates wood chip and carries out the construction, ownership and operations of a greenfield pulp mill. Under the Construction & Property segment, the company operates Poh Lian Construction Pte Ltd, a wholly owned subsidiary, engaged in the construction of commercial and high end residential properties.

In July this year, the company announced that it entered into an agreement with an Indonesian company, PT Dian Swastatika Sentosa Tbk (DSS), to acquire around 67% of PT Golden Energy Mines Tbk (GEMS) from DSS. This will be done by exchanging new ordinary shares of United Fiber, representing approximately 94% of the enlarged share capital of the company.

GEMS is a coal-mining company and it has a goal to “become one of the leading coal player in the Asia Pacific”.

On 27th December 2013, DSS, which is a listed company in Indonesia, will convene an extraordinary general meeting to approve, amongst other things, the proposed DSS acquisition.

The company made a loss of US$73.3 million in Financial Year 2012. In the previous year, it made losses, albeit lesser, of US$33.4 million.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.