Ann: Investment Transaction For PrIME Biologics P, page-10

re: Ann: Investment Transaction For PrIME Bio...
A good scenario for the JV

It is always of value to analyse the situation from different perspectives. JM and HN are great for ideas and for brainstorming. Over years they have come to recognise from where the greatest rewards are likely to come. In the many presentations they have clearly displayed the relative potential of the divisions of NuSep. Plasma fractionation is always the standout. In Asia they discovered a niche in the market as well as a source of very cheap input plasma (CUP). Expansion to other regional countries seems a natural probability.

Tables of forecast revenue figures have been displayed for all to see (e.g. ann. 9 Aug 2013). If only they had S$30M to establish a plant! This has been openly discussed at many meetings.

Now they have excellent premises in Singapore already with substantial fit out, governments on side, a $1M soft loan, and now also the balance of funds required. [A car, a house, a wedding ring and ….. yes!] How could they refuse?

It is all there in place. The Xeraya moneys they can effectively regard as a long term loan. Since the 10% interest is fixed it doesn’t really matter about the Preference Shares as projected returns far exceed such a ‘menial’ rate. The August 2013 Newsletter gives forecast pre-tax profit scenarios for the first year of production for Prime Bio as,

Base case . . . . . . S$22M
Medium case . . . . S$44M
Optimistic case . . S$60M

Taking the medium case example, Xeraya and JP Asia receive S$1.6M only (10% interest fixed), while at least S$26.5M (60%) less tax, could go to NSP if not ploughed back into Prime Bio. Presumably, the remaining S$16M less tax stays with Prime Bio for further development.

So what could possibly go wrong?

Juke