Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Sawada (8699 JP) Stuck Between Mongolian Central Bank Idealism and Reality

Sawada Gets Some Good News - Expect a Selldown

Sawada Selldown May Be Done - Now On To Earnings

Sawada Holdings (8699) Partial Tender. Delayed Again. 13th Time a Charm?

Quiddity Advisors

Event-Driven

Back almost a year ago, in the third week of February 2020, there was a very brief announcement by an entity called ウプシロン投資事業有限責任組合 or Upsilon Investment Limited Partnership which itself is an entity of <a href="http://www.metacapital.co.jp/index.html" target="_blank" rel="noopener">META Capital</a> which is an investment firm owned by two former Japanese fixed income people who worked at foreign brokers in the early noughties (who share 75% ownership) and Idei Nobuyuki, former CEO of Sony (now 83yrs old), who owns 25%.<div>The announcement was that the entity was launching a Tender Offer to buy 50.1% of <a href="https://www.smartkarma.com/entities/sawada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener">Sawada Holdings (8699 JP)</a> which is the former HIS Securities, which was before that HS Securities (renamed after Hideo Sawada, the entrepreneur and mover and shaker behind HIS Travel (now <a href="https://www.smartkarma.com/entities/h-i-s-co-ltd" target="_blank" data-smartkarma-citation="entities:19311:1" rel="noopener">H I S Co Ltd (9603 JP)</a>) purchased it closed to 20 years ago). The announcement said simply that it was launching a Tender Offer to start on 20 February 2020, ending on 19 March 2020 (a 20 day period - the minimum). Sawada Holdings followed up the next morning with an <a href="http://www.sawada-holdings.co.jp/wp/wp-content/uploads/2020/02/shdpress20200220_2.pdf" target="_blank" rel="noopener">announcement</a> containing the Upsilon announcement. </div><div>
The Tender was to buy 19,859,758 shares. Hideo Sawada owns 10,628,000 shares, or 26.81%. A company affiliated with him called 秀インター owns 1,100,000 shares or 2.77%. Together, those two entities with 11,728,000 shares (29.58%) have agreed to tender. That got Upsilon almost 60% of the way towards their Tender Offer. Another entity which looked reasonably related to Sawada-san and his history owned another 15% and other shareholders who had been selling owned enough to get Upsilon over the minimum hurdle. So the timeframe was to get it done quickly. 
Then the Central Bank of Mongolia said Upsilon had not asked for its approval, which they asserted as necessary, given that it would involve a change in control in one of Mongolia's largest banks, Khan Bank LLC, in which <a href="https://www.smartkarma.com/entities/sawada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener">Sawada Holdings (8699 JP)</a> owned 60%, and which represents 90+% of Sawada Holdings' earnings and assets over the years. 
The erstwhile bidders and Sawada Holdings went back and forth with the Central Bank of Mongolia and it took them until the 28th of January 2021 to confirm that the Mongolian Central Bank had accepted the document submission required.
The Tender Offer has now been extended through 10 February, and IF the Mongolian Central Bank approves promptly, it could actually end then. I have my doubts, but if the Mongolian Central Bank approves, I expect it would require an amendment to the Tender Offer filing, which would necessitate extending once again. 
<h3>HOWEVER...</h3>
On 28 January, a plenary session of Parliament discussed and approved a draft bill amendment to the Banking Law. 
And this could change everything.
More below the fold.
<hr>
The history of this event is in the insights below:<a href="https://www.smartkarma.com/insights/sawada-holdings-partial-offer-arb-grids-pro-ration" target="_blank" data-smartkarma-citation="insights:37141" rel="noopener"></a>  <a href="https://www.smartkarma.com/insights/sawada-holdings-partial-tender-an-odd-duck" target="_blank" data-smartkarma-citation="insights:36802" rel="noopener">Sawada Holdings Partial Tender - An Odd Duck</a>  <a href="https://www.smartkarma.com/insights/sawada-holdings-partial-offer-arb-grids-pro-ration" target="_blank" data-smartkarma-citation="insights:37141" rel="noopener">Sawada Holdings Partial Offer - Arb Grids &amp; Pro-Ration</a> <a href="https://www.smartkarma.com/insights/sawada-withholds-opinion-on-tob-mongolia-deal-risk-may-exist" target="_blank" data-smartkarma-citation="insights:36959" rel="noopener">Sawada Withholds Opinion on TOB - Mongolia Deal Risk May Exist</a> <a href="https://www.smartkarma.com/insights/sawada-holdings-tender-holding-pattern" target="_blank" data-smartkarma-citation="insights:37764" rel="noopener">Sawada Holdings Tender Holding Pattern</a>  <a href="https://www.smartkarma.com/insights/sawada-holdings-partial-offer-update-it-s-a-buy-here" target="_blank" data-smartkarma-citation="insights:37345" rel="noopener">Sawada Holdings Partial Offer Update - It's a Buy Here</a>  <a href="https://www.smartkarma.com/insights/sawada-holdings-8699-partial-tender-delayed-again-13th-time-a-charm" target="_blank" data-smartkarma-citation="insights:42124" rel="noopener">Sawada Holdings (8699) Partial Tender. Delayed Again. 13th Time a Charm?</a>  <a href="https://www.smartkarma.com/insights/sawada-holdings-still-a-long-but" target="_blank" data-smartkarma-citation="insights:43548" rel="noopener">Sawada Holdings - Still A Long But...</a>  
</div>

Back almost a year ago, in the third week of February 2020, there was a very brief announcement by an entity called ウプシロン投資事業有限責任組合 or Upsilon Investment Limited Partnership which itself is an entity of META Capital which is an investment firm owned by two former Japanese fixed income people who worked at foreign brokers in the early noughties (who share 75% ownership) and Idei Nobuyuki, former CEO of Sony (now 83yrs old), who owns 25%.The announcement was that the entity was launching a Tender Offer to buy 50.1% of Sawada Holdings (8699 JP) which is the former HIS Securities, which was before that HS Securities (renamed after Hideo Sawada, the entrepreneur and mover and shaker behind HIS Travel (now H I S Co Ltd (9603 JP)) purchased it closed to 20 years ago). The announcement said simply that it was launching a Tender Offer to start on 20 February 2020, ending on 19 March 2020 (a 20 day period - the minimum). Sawada Holdings followed up the next morning with an announcement containing the Upsilon announcement. 
The Tender was to buy 19,859,758 shares. Hideo Sawada owns 10,628,000 shares, or 26.81%. A company affiliated with him called 秀インター owns 1,100,000 shares or 2.77%. Together, those two entities with 11,728,000 shares (29.58%) have agreed to tender. That got Upsilon almost 60% of the way towards their Tender Offer. Another entity which looked reasonably related to Sawada-san and his history owned another 15% and other shareholders who had been selling owned enough to get Upsilon over the minimum hurdle. So the timeframe was to get it done quickly. 
Then the Central Bank of Mongolia said Upsilon had not asked for its approval, which they asserted as necessary, given that it would involve a change in control in one of Mongolia's largest banks, Khan Bank LLC, in which Sawada Holdings (8699 JP) owned 60%, and which represents 90+% of Sawada Holdings' earnings and assets over the years. 
The erstwhile bidders and Sawada Holdings went back and forth with the Central Bank of Mongolia and it took them until the 28th of January 2021 to confirm that the Mongolian Central Bank had accepted the document submission required.
The Tender Offer has now been extended through 10 February, and IF the Mongolian Central Bank approves promptly, it could actually end then. I have my doubts, but if the Mongolian Central Bank approves, I expect it would require an amendment to the Tender Offer filing, which would necessitate extending once again. 
HOWEVER...
On 28 January, a plenary session of Parliament discussed and approved a draft bill amendment to the Banking Law. 
And this could change everything.
More below the fold.

The history of this event is in the insights below:  Sawada Holdings Partial Tender - An Odd Duck  Sawada Holdings Partial Offer - Arb Grids &amp; Pro-Ration Sawada Withholds Opinion on TOB - Mongolia Deal Risk May Exist Sawada Holdings Tender Holding Pattern  Sawada Holdings Partial Offer Update - It's a Buy Here  Sawada Holdings (8699) Partial Tender. Delayed Again. 13th Time a Charm?  Sawada Holdings - Still A Long But...   


Sawada Holdings - Change of Paradigm Means Opportunity

HS Holdings

Sawada Holdings - Change of Paradigm Means Opportunity