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Trans Freight Containers


Trans Freight Containers was operating in the business of manufacturing containers.

The company currently has no operating activity and management is considering diversification into other businesses such as specialised fabrication of multi-purpose accommodation units.  It has had no operating activity for the last several years.

The container business was subject to heavy Chinese dumping that made the business so unprofitable it had to stop operations altogether. 

The company does, however, have fixed assets – building, estate, plant and machinery along with loans and advances (earning interest income), some inventory of marine cargo containers and cash balances.  It reported its net worth at just over 30cr alongside a debt load of 10cr, which is covered by cash balances of 13cr (as at 30th September, 2011).

Management has been selling land holding as well as liquidating fixed assets and inventories, and recovering loans in the last couple of years. 

They haven’t however, paid any dividends or made any cash distributions to shareholders despite halting operations and liquidating some of the company’s assets.

Therefore, minority shareholders are dependent on management’s timetable for liquidation and their capital allocation skills in the new businesses they pursue (for which there is no track record to analyse) to determine their returns on this investment in the company’s equity.

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