AVIVA NDB Insurance (CTCE) for sale?

Quibit · 1 AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 2:23 pm

Quibit

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There is rumour in the market that AVIVA-NDB (CTCE) is for sale. Who owns Aviva-NDB?. CDIC

Latest Accounts of CDIC
http://www.cse.lk/cmt/upload_report_file/365_1298633958.pdf

AVIVA NDB Insurance (CTCE) for sale? Cdic10

AVIVA NDB Insurance (CTCE) for sale? Cdic10

CDIC owns total 41.56% of AVIVA NDB Insurance Company (CTCE). As given above the book value of the said investment to CDIC is only Rs 741mn (Please see the accounts above under the investment in Associate Companies). The current market capitalization of AVIAV NDB is approximately Rs 10bn. Therefore 41.56% owned by CDIC should be worth approximately Rs 4.15bn.

Lets consider mark to market method to value CDIC
Total Asset Value of CDIC without Associate Company = Rs 4.5bn - Rs 0.74bn = Rs 3.76bn.
Value of 41.56% Stake AVIVA NDB = Rs 10bn x 41.56% = 4.15 bn
Total Asset Value of CDIC = Rs 7.91bn
Total issued capital of CDIC is only 43.8mn shares
99.9% is owned by NDB and free float is only 150,000 shares.
CDIC also own and control the AVIVA NADB Fund Management Company which manages the AVIVA NDB Funds.

This makes CDIC very interesting proposition?

Last edited by Quibit on Thu May 12, 2011 6:29 pm; edited 5 times in total

cse.alpha · 2 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 2:46 pm

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Aviva divestiture gathers momentum with Delta Lloyd sale - Daily Mirror of 20th April 2011

http://print.dailymirror.lk/business/127-local/41333.html

Rocky · 3 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 3:31 pm

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Will Uncle Harry pull out his stacks of cash and buy up some part of the insurance business?

Why is he silent?

Quibit · 4 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 5:48 pm

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Aviva divestiture gathers momentum with Delta Lloyd sale

Further fuelling speculation that Aviva may divest or downsize its interest in local insurance company Aviva NDB, the Chief Executive Officer of Aviva Group Andrew Moss had told the UK’s Daily Telegraph that he would dispose of assets in countries where Aviva units under-perform following the decision to sell part of a Dutch-Belgium insurance company.

Aviva a few days back said it will raise €475 million (£419 million) with sale of a 15.1 percent stake in its Dutch and Belgium subsidiary, Delta Lloyd showing that the second largest insurer is really divesting some of its stakes in a book building process.

Moss has promised more value from the restructuring of its business, to focus on 12 core markets which include the UK, France, Italy, Spain, Ireland and Poland.

“Reducing our share holding in Delta Lloyd will not only enhance our liquidity and further strengthen our balance sheet, but will also back our focus on pursuing profitable growth in markets where we have strength and scale,” Moss told Daily Telegraph.

The sale, which will reduce Aviva’s stake in Delta Lloyd from 58 percent to 43.1 percent, is the insurer’s first big disposal since unveiling its strategy to slim down international operations.

Delta Lloyd, which offers general and life insurance plus banking products, was wholly owned by Avvia until November 2009, when a 42 percent stake was floated at €16 a share.

Since taking over from Richard Harvey nearly four years ago, Moss has been criticized by investors as Aviva’s share price has under-performed compared to rivals such as Prudential.

Aviva is present in 30 countries, and it entered Sri Lanka in 2006, partnering with National Development Bank to establish Aviva-NDB Insurance, which was earlier Eagle Insurance.

In November, Aviva Group said it would remain in countries where Aviva’s operations provide at least $100 million in profit and gives a minimum 12% return on capital, or is valued at a minimum of $1 billion.

Daily Mirror
http://print.dailymirror.lk/business/127-local/41333.html

MarketSIRA · 5 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 13, 2011 11:20 am

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hybrid_OS wrote:Will Uncle Harry pull out his stacks of cash and buy up some part of the insurance business?

Why is he silent?

I think Uncle Harry Will put his money in CDIC...

maalinda · 6 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 13, 2011 11:49 am

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MarketSIRA wrote:

hybrid_OS wrote:Will Uncle Harry pull out his stacks of cash and buy up some part of the insurance business?

Why is he silent?

I think Uncle Harry Will put his money in CDIC...

i highly doubt.

Quibit · 7 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 13, 2011 12:49 pm

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I dont think Harry would buy this. But whoever who is going to buy will end up either paying CDIC or buying CDIC coz they own the fund management company and 41% of the AVIVA -NDB.

There are many big moves happening behind the scene.

Top 20 Shareholders of CDIC
AVIVA NDB Insurance (CTCE) for sale? Cdic110

AVIVA NDB Insurance (CTCE) for sale? Cdic110

innam · 8 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 19, 2011 2:44 pm

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Good post by @qb

But one thing to look at is that currently CDIC is slightly overpriced compared to what they own.
CDIC's market cap at current prices is 9.6 billion
CTCE's market cap at current prices is 9.3 billion
going by @qb's calculation adjusted NAV of CDIC is around 185.....meaning that the sale of CTCE at current prices is already priced in.
//

of course speculators don't look at fundamentals so future mispricing may happen especially given the low free float of CDIC shares

Quibit · 9 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 19, 2011 3:03 pm

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innam wrote:Good post by @qb

But one thing to look at is that currently CDIC is slightly overpriced compared to what they own.
CDIC's market cap at current prices is 9.6 billion
CTCE's market cap at current prices is 9.3 billion
going by @qb's calculation adjusted NAV of CDIC is around 185.....meaning that the sale of CTCE at current prices is already priced in.
//

of course speculators don't look at fundamentals so future mispricing may happen especially given the low free float of CDIC shares

2X BV is not very expensive for a company of this nature. I have not taken the market value for the 100% ownership of the AVIVA-NDB Fund Management Company owned by CDIC. Union Bank bought NAMAL at Rs 450mn. All these need to be factored in. But what I like most is current Cash per Share of the Company.

factFINDER · 10 Re: AVIVA NDB Insurance (CTCE) for sale? Sat May 21, 2011 9:27 am

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maalinda wrote:

MarketSIRA wrote:

hybrid_OS wrote:Will Uncle Harry pull out his stacks of cash and buy up some part of the insurance business?

Why is he silent?

I think Uncle Harry Will put his money in CDIC...

i highly doubt.

I have a big question to ask Shocked

Is Aviva NDB Insurance PLC (CTCE) or CDIC for sale??

87.27% of CTCE owned by Aviva NDB Finance Lanka (Private) Limited, which is Associate of CDIC with 41.56%. the balance is owned by AVIVA (a subsidery of AVIVA). Therefore the controlling stake (51%) is hold by AVIVA through Aviva NDB Finance Lanka (Private) Limited.

If AVIVA want to exit wholly or partially from CTCE, it is not CDIC, but stakes of Aviva NDB Finance Lanka (Private) Limited which AVIVA currently hold will be diversted. As I remember, it was the same thing happend when "Zurich" exit from CTCE few years ago. But, NDB-CDIC was keeping its stake (less than 50%) continuously. It is also possible to make an intermediary arrangement by NDB (jointly with BOC, EPF), if AVIVA seek immidiate exit.

Therefore, if "Uncle Harry" interested in a stake in CTCE, he will put his money in Aviva NDB Finance Lanka (Private) Limited ... but not in CDIC.

Rocky · 11 Re: AVIVA NDB Insurance (CTCE) for sale? Sat May 21, 2011 9:37 am

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Good thinking FF.

The Govt. is like a Bull in a China Shop trying to getmore and more cash and grab all the insurance business from AVIVA which is also pausible factor to consider. The mechanics of it may be sinister but possible. Any thing is possible with this setup.

Dont forget very soon a lot of arrears on EPF / Gratuity / Pension will start flooding the coffers and who knows it may materialize soon.

One + Rep for thinking out of the box from me.

Last edited by hybrid_OS on Sat May 21, 2011 9:40 am; edited 1 time in total (Reason for editing : Diction, diction)

seyon · 12 Re: AVIVA NDB Insurance (CTCE) for sale? Sat May 21, 2011 12:26 pm

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Very interesting stuff.. Who will win this game....

CSE1 · 13 CDIC Thu May 26, 2011 1:34 pm

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CDIC heavily trade today will AVIVA NDB insurance's sale ??

dinusl · 14 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 5:05 pm

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CSE1 wrote:CDIC heavily trade today will AVIVA NDB insurance's sale ??

more than 20% of public holding shares has traded today....I'm smelling something going to happened with this.

Last edited by dinusl on Thu May 26, 2011 5:06 pm; edited 1 time in total (Reason for editing : spelling)

factFINDER · 15 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 7:22 pm

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hybrid_OS wrote:Good thinking FF.

The Govt. is like a Bull in a China Shop trying to getmore and more cash and grab all the insurance business from AVIVA which is also pausible factor to consider. The mechanics of it may be sinister but possible. Any thing is possible with this setup.

Dont forget very soon a lot of arrears on EPF / Gratuity / Pension will start flooding the coffers and who knows it may materialize soon.

One + Rep for thinking out of the box from me.

My guess was that the govt controlled funds are already flooded in most of private banks including NDB, and their next step will be to Insurence (now govt have only SLIC insted SLIC & NIC sometimes ago).... they already in AVIVA through NDB, but no controlling stake with them ... who can tell excectly they will not try this time?

We may watch the show soon!

(btw ... who was the receiver of hybrid_OS's +rep given above??)

duke · 16 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 7:55 pm

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Quibit wrote:There is rumour in the market that AVIVA-NDB (CTCE) is for sale. Who owns Aviva-NDB?. CDIC

This statement looks very misleading.

"Aviva NDB" is owned by around 50:50 between Aviva and NDB.
It is the Aviva people who are looking for a seller, not the NDB. CDIC is the NDB portion where NDB owns 99% of it.

Look at the top 20 shareholders of CDIC. Having 1500 is enough to be listed in that. So it is very very much easier to push up the price of this CDIC which has nothing to do with a selling.
What I see is a totally manipulated share. Regulators, if they exist, should monitor the transactions.

Read factfinder's facts.

Gaja · 17 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 9:30 pm

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i feel like other illiquid shares cdic also moving up

Gaja · 18 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:07 am

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somebody even willing to pay 322/=, for cdic

dinusl · 19 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:09 am

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Gaja wrote:somebody even willing to pay 322/=, for cdic

Or even more...

Gaja · 20 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:21 am

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dinusl wrote:

Gaja wrote:somebody even willing to pay 322/=, for cdic

Or even more...

yes now 400, and no offers

duke · 21 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:24 am

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Gaja wrote:

dinusl wrote:

Gaja wrote:somebody even willing to pay 322/=, for cdic

Or even more...

yes now 400, and no offers

because there's only a very few shares. rare stamp for ~~investors~~ stamp collectors. Smile

cse.alpha · 22 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:46 am

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innam wrote:

But one thing to look at is that currently CDIC is slightly overpriced compared to what they own.
CDIC's market cap at current prices is 9.6 billion
CTCE's market cap at current prices is 9.3 billion
going by @qb's calculation adjusted NAV of CDIC is around 185.....meaning that the sale of CTCE at current prices is already priced in.
//

of course speculators don't look at fundamentals so future mispricing may happen especially given the low free float of CDIC shares

Good point by innam

CDIC book value per share at 31st March 2011 was Rs119 (Rs5.2 billion shareholder funds).

Investment in associate is Rs1.3 b at this date

CDIC indirectly owns 36.27% stake in CTCE through associate Aviva NDB Finance - CTCE is currently worth Rs8.7 billion (Rs290 times 30 million shares).

So a 36.27% stake in CTCE, without any takeover premium, is worth Rs3.2 b - against Rs1.3 b in CDIC books, a revaluation gain of Rs1.9 b, boosting CDIC value to Rs7.1 b

Rs1.9 b sounds a lot, but it is only Rs42 in per share terms of CDIC, which has 43.9 m shares issued.

That would boost CDIC book value to around Rs161 per share.

At current price of over Rs400 per CDIC share, a very generous takeover premium is being expected by investors who value CDIC at almost Rs18 b now. This is the CSE after all, stranger things have happened.

Or are traders perhaps more attracted by low free float of CDIC as NDB owns 99.66% of company. But please be aware of valuations, they will matter in the end.

Jeremy · 23 Re: AVIVA NDB Insurance (CTCE) for sale? Tue Sep 25, 2012 9:58 pm

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Going through this old post I realized, how some of our members have predicted Aviva NDB sale in May 2011. Hats off to these members and their predictions!! I am sure even NDB board would not have even dreamed about these things at the time our members predicted these things.

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AVIVA NDB Insurance (CTCE) for sale?

1 AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 2:23 pm

Quibit

2 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 2:46 pm

cse.alpha

3 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 3:31 pm

Rocky

4 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 12, 2011 5:48 pm

Quibit

5 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 13, 2011 11:20 am

MarketSIRA

6 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 13, 2011 11:49 am

maalinda

7 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 13, 2011 12:49 pm

Quibit

8 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 19, 2011 2:44 pm

innam

9 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 19, 2011 3:03 pm

Quibit

10 Re: AVIVA NDB Insurance (CTCE) for sale? Sat May 21, 2011 9:27 am

factFINDER

11 Re: AVIVA NDB Insurance (CTCE) for sale? Sat May 21, 2011 9:37 am

Rocky

12 Re: AVIVA NDB Insurance (CTCE) for sale? Sat May 21, 2011 12:26 pm

seyon

13 CDIC Thu May 26, 2011 1:34 pm

CSE1

14 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 5:05 pm

dinusl

15 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 7:22 pm

factFINDER

16 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 7:55 pm

duke

17 Re: AVIVA NDB Insurance (CTCE) for sale? Thu May 26, 2011 9:30 pm

Gaja

18 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:07 am

Gaja

19 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:09 am

dinusl

20 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:21 am

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21 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:24 am

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22 Re: AVIVA NDB Insurance (CTCE) for sale? Fri May 27, 2011 10:46 am

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23 Re: AVIVA NDB Insurance (CTCE) for sale? Tue Sep 25, 2012 9:58 pm

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24 Re: AVIVA NDB Insurance (CTCE) for sale?

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