And So Stamford College Plunges ......

It was on 8th March 2010 when Stamford College made the following announcement: Stamford To Build Steel Mill!?

• Stamford College to build RM29.79m steel mill
  Written by Joseph Chin
  Monday, 08 March 2010 20:00
  
  KUALA LUMPUR: STAMFORD COLLEGE BHD [] plans to build a steel mill costing RM29.79 million as it diversifies from education services to steel products.
  
  It said on Monday, March 8 that sources of funding would comprise of RM28.9 million from internally generated funds and the remaining RM883,579 from leasing.
  
  It added the rental rate for the five-acre land leased (inclusive of a factory building) from Spring Bond Sdn Bhd in Beranang industrial estate, Selangor would be RM12,500 per month.
  
  Stamford College said the principal market for the products and raw materials is Malaysia. The sales are expected to derive 100% from Malaysia for the first two years.
  
  "The plant's annual production capacity is 48,000 tonnes. For the financial year 2010 and the financial year 2011 output is budgeted at 50% and 70% of production capacity respectively," it said.

It was simply ludicrous in my opinion. A college business could diversify into the steel industry?

And here was their most recent quarterly announcement prior to March 2010. Quarterly rpt on consolidated results for the financial period ended 31/12/2009

It was hardly profitable. Which was baffling because everyone else was making crazy money in the education business.

Perhaps Stamford College management needed to sit thru a course in business management. :P

Recently education stocks were in flavour and Stamford College went along with the ride. LOL! (Told you that at any given day, any stock also can. :P )

The happy go lucky days.... ended when the company announced that Bursa rejected their steel plan.

• We refer to the announcement dated 5 March 2010 in relation to the application for the Proposed Regularisation Plan submitted to Bursa Securities Malaysia Berhad (“Bursa Securities”) on even date for approval. Public Investment Bank Berhad wishes to announce that Bursa Securities had, vide its letter dated 26 July 2010, rejected the application by the Company in relation to the Proposed Regularisation Plan.

Stamford College slides after Bursa rejects revamp plan

And on today's Star Business Stamford College plunges 38%

• Wednesday July 28, 2010
  
  Stamford College plunges 38%
  
  PETALING JAYA: Shares in Stamford College Bhd plunged 15.5 sen, or 37.8%, on knee-jerk reaction that its proposed regularisation plan has been rejected by Bursa Malaysia.
  
  The stock closed at 25.5 sen on volume of 5.61 million shares.
  
  The stock exchange rejected Stamford College’s plan premised on concerns that its steel manufacturing business was not feasible, and its education operation was struggling to stay profitable.
  
  In a letter dated July 26, the company said Bursa was concerned that the proposed regularisation plan did not comply with Paragraph 3.1(a) of Practice Note 17 of the Main Market listing requirements.
  
  Bursa gave three reasons for the plan rejection.
  
  First, the steel manufacturing business had only commenced operations in February 2010 and had yet to show that it can generate profits and positive cashflows or be proven to be viable.
  
  “In addition, the steel manufacturing business may be subjected to further funding requirements and, therefore, could affect the enlarged Stamford College group’s ability to manage the resources required for its operations,” said the company in an announcement to Bursa.
  
  The steel manufacturing business is also highly dependent on a single supplier and single customer, which is a related party.
  
  Third, as for the education business, it is highly competitive with a low barrier to entry.
  
  Even though Stamford College has been profitable in the financial year ended Dec 31, 2009, it is uncertain if this can be maintained, given that the group has been making losses over the years and there are no significant changes in its business plan for the education segment.
  
  “As such, there is uncertainty whether the profits to be generated from the education business would be able to sustain the group’s performance.
  
  “This is given that the steel manufacturing business is still unproven at this juncture,” said the company.
  
  Shares in Stamford College will be suspended from Aug 3 and Bursa will proceed to delist the company if it does not appeal against the exchange’s decision within the stipulated timeframe.

Knee jerk rejection???????

Harloooo...... !!!!!