contracts update

Following are notes of my conversation with republic consulting earlier today:

China:
JV is currently focused mainly on signing up GAS Cylinder manufacturers. It seems they are starting to move into execution phase but my impression is this is slowly progressing. They do not consider most to be significant enough for market update so they will announce, volume, as part of the market update on August.

Maldives
According to them the deal is on. It is expected to generate royalties from visitors and foreign workers coming into the country. If the deal will finally come through, I am not sure this will stay like that. According to the news in the Maldives the ACC is expected to VET the new agreement negotiated by the cabinet with NEXBIS and they said that BOT is not what they are after but more of outright buy, like Sri Lanka, and the estimate in the paper was 4M for such system. I am not sure if this is bad (loss of long term prospect) or good (more immediate cash injection)

Malaysia
The announcement is expected in the "near future". However this contract is likely to generate royalties only from the foreign worker annual permit. Only a small amount is expected to be generated from the amnesty exercise. This will be a long term contract with more secure revenue because this will not be subject to a GOV capex/opex decisions. However this may take few months before meaningful actual receivables starts flowing because the GOV will first need to finish the amnesty exercise and only then the (illegal) workers will know if they can stay and consequentially apply and pay annual permit. The current legal foreign workers will probably start sooner.

They say the future looks much better for FY11-12 but I assume some tough months ahead before the cash flow go back to positive