SCMP Group to be renamed Armada after selling newspaper

Ben Kwok February 19, 2016 15:43

SCMP Group is scheduled to complete the sale of the South China Morning Post to Alibaba Group, chaired by Jack Ma Yun, on March 24. Photo: Reuters

Add a new name to Hong Kong's listed property plays.

Armada Holdings (南潮控股有限公司) will be the moniker of the rump of SCMP Group (00583.HK) after the firm completes the HK$2 billion (US$260 million) sale of the South China Morning Post to Alibaba Group Holding Ltd. on March 24.

Why Armada?

The 52-page document SCMP Group released Friday morning gave no explanation.

It merely said, “The Board considers that the proposed name will refresh the corporate identity and image of the Remaining Group as it focuses on the property investment business.”

A firm with five property assets – including a yet-to-be-built luxury residential project in Clear Water Bay and two floors in Bank of America Tower -- Armada will be a sister company of Kerry Properties Ltd. (00683.HK), both controlled by Robert Kuok Hock Nien’s Kerry Group.

So what can we make of "Armada"?

Well, it is the Portuguese and Spanish word for naval fleet, and the Czech and Slovak word for “armed force”.

But we doubt if Kuok’s second property arm in Hong Kong will want to venture into Europe, nor -- despite its proposed Chinese name, which may be translated as "Southern Tide" -- into the South China Sea, where China is increasingly “militarizing” its islands, most recently by deploying an advanced surface-to-air missile system.

From the Chinese name, it seems that Kuok aspires to do some “trendy” things.

But interestingly, SCMP Group dropped an attempt to branch out into online shopping by proposing to buy Hong Kong fashion e-tailer mydress.com for nearly HK$40 million in October.

It ended up paying HK$3 million in December as a termination fee for the deal, which was overtaken by the sale of the group's media assets to Alibaba, which it announced on Dec. 11.

At the time, the company said it intended to apply a very substantial proportion of the net proceeds from the disposal to the payment of a special cash dividend and to use the remainder for the general working capital of the group.

But it turned out that the group decided to distribute HK$2.5 billion, or HK$1.60 per share, way more than the proceeds, as a special dividend to its shareholders.

One possible reason for such a change of heart may have to do with the need to get the support of the minority shareholders for the sale.

Specifically, the second-largest shareholder, Silchester International, which owns 14.18 per cent of SCMP Group, has not been able to agree with Kerry Group on a possible privatization price.

SCMP Group shares (which last traded at HK$1.77) have been suspended for three years for lack of a sufficient public float.

Shareholders were stuck with the stock, but they will manage to get most of its value back through the special dividend.

-- Contact us at [email protected]

BK/JP/FL

Ben Kwok

EJ Insight writer

Hong Kong

Hong Kong people become experts in UK property market Mark O'Neill

Deptford, Battersea, Mill Hill and Salford – a year ago few people in Hong Kong had heard these names. But not now – these districts of London and Manchester are on the map of people looking to buy

Celebrating for Thanksgiving 2020 Ben Kwok

Every year we celebrate Thanksgiving a month before Christmas, reflect and prepare a better year ahead. This year will be a little special. We may not be able to celebrate with a lot of people due to

HK startups need a more coherent, radical subsidies policy Justin Lau

A few days ago, Science Park declared the foundation of the HKSTP Startups Alumni Association (SAA), which would kick off with 235 members. Yet these “business associations”, as with much of their

This time is for real: The Hong Kong we know is dying Michael Chugani

Let us not mourn the dying of Hong Kong. Yes, the winds of change are blowing, but let us instead celebrate the heroes who fought and are still fighting to keep the Hong Kong we know alive. The two

After 23 years, the former British colony is back to square one Frank Ching

The mass resignation of pan-democratic legislators protesting against the disqualification of four of their number takes Hong Kong back 23 years, to the handover of the British colony to China and an