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GoldenAgr
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yipyip
Master |
28-May-2009 23:44
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Comments (CIMB) 28/May/09 Not surprising. Golden Agri had already flagged to the market two weeks ago that it was mulling a rights issue. The amount of funds to be raised matches the amount speculated by the media, of around US$200m. What was new were the two free detachable warrants for every five rights shares subscribed which would be EPSdilutive if and when the warrants are in-the-money. We believe this is to help sweeten the deal. Also, the rights issue price is at a sharp 60% discount to the last closing price against our earlier expectation of 40%. We understand that this is to ensure strong take-up of the rights. Assuming the net proceeds fetch an annual return of 5%, we estimate that the rights will dilute our FY10 EPS forecast for Golden Agri by 12%. We are not computing dilution from the warrants at this juncture as they are out-of-the money. Although the news is not a surprise, we maintain our negative take on it given: 1) the earnings dilution; 2) the group’s ability to fund its capex needs with internal funds; and 3) its low net gearing ratio of 0.09x as at 31 Mar 09. Figure 1: Impact on EPS and target price Tuesday's closing price (S$ per share) 0.45 Rights price (S$ per share) 0.18 Theoretical ex-rights price (S$ per share) 0.41 Current number of shares (m) 10,375 x 0.45 = a. $4,668.75 17-for100 rights issue (m) 1,764 x 0.18 = b. $317.52 Total shares after rights issue (m) 10,375 + 1,764 = c. 12,139 After dilution : (a.$4668.75 + b.$317.52) / c.12,139 = $0.411 |
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E-war
Veteran |
28-May-2009 16:09
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Oh haha, I c. No wonder... Thks! | ||||
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Alligator
Veteran |
28-May-2009 15:52
Yells: "learning from past " |
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They have not released the time table on their announcement yet
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E-war
Veteran |
28-May-2009 15:08
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Hi, I 'm having trouble finding the XR, nil-paid rights trading dates on SGX. Anyone has advice? Thkq  .
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jeremyow
Senior |
28-May-2009 12:02
Yells: "Passionate business investor" |
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Hi, I think it is more accurate to use the closing price on the last day of CR just before the next day goes XR to calculate the theorethical ex-rights price. So, if the price of GAR trends downwards over this current period of time while on CR, investors may expect to get an even lower theorethical ex-rights price below $0.40 perhaps. On the other hand, if the price of GAR trends upwards, then the theorethical ex-rights price will eventually be higher. This ex-rights price is just a theorethical price to serve as a reference to the share price of GAR after the effect of rights issue. As one can see, this theorethical ex-rights price can change depending on the sentiments of investors trading its main shares during CR period. Since it is just a theorethical price after effects of rights issue and is dependent on trading sentiments, it may not reflect very accurately the fair value of GAR shares. |
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E-war
Veteran |
28-May-2009 02:46
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Hi Alligator, so does this mean that total price for it after XR will still be 0.41? Tat's pretty ex isn't it after rights? | ||||
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zanetti
Member |
27-May-2009 20:58
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x 0 Alert Admin |
sorry i'm a bit blur here... so is it a good idea to exercise the rights ? | ||||
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dealer0168
Elite |
27-May-2009 20:04
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Oh no wonder, the price back track when RIGHT announce. UNDERSTOOD. So that means better entry price is below $0.40 loh.
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Alligator
Veteran |
27-May-2009 15:10
Yells: "learning from past " |
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read their announcement .. it is 41 cents ex-rights based on 45 b4 announcement work out: 100x 45 cents=4500 17x18cents=306 add them 4806 divide by 117===>>> 4806/117==41.07 == theorethical ex-right trading price (TERP)
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Alligator
Veteran |
27-May-2009 14:55
Yells: "learning from past " |
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x 0 Alert Admin |
warrant is simply given to you at 2 warrant for every 5 rights. Warrant has 3 year expiry, it gives you the rights to subscribe for new mother share at a pretermined price of ( S$0.54). it means within the three years if you want to convert to mother share, you pay S$0.54 each. To exercise your warrant you follow the procedure by the warrant agent Warrant, when listed in SGX , can be traded also, just like share. Warrant, when expired, will also become worthless.
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Alligator
Veteran |
27-May-2009 14:48
Yells: "learning from past " |
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You have basically 3 options 1. Exercise your Rights , pay for it, then you get rights converted to mother shares and you have some warrant. 2. Sell away your rights during rights trading period 3. Do nothing, then see your shares get diluted by the new rights and warrant when other exercise.
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Centaur
Veteran |
27-May-2009 14:33
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don't understand why the rights issue is at such a deep discount to the current price. Any basis for setting the rights at 18cts? | ||||
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erwinliong
Member |
27-May-2009 14:33
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I am newbie with rights issue... Say I have 10,000 units of GAR. What are the options that I have? What does it means/what do I have to do if I want to exercise the rights given? Thx in advance for the info. |
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oinkoink1999
Senior |
27-May-2009 14:12
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x 0
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warrants again...can someone explain how this mechanism work in a nut shell?... |
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rodney301
Member |
27-May-2009 13:55
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x 0
x 0 Alert Admin |
how much is the diluted price??? | ||||
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tedlim_me
Senior |
27-May-2009 13:54
Yells: "there is no equity in the equity markets" |
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x 0
x 0 Alert Admin |
wow.. sounds gd!
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fruitty
Senior |
27-May-2009 13:51
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The Rights Issue price is 18 Singapore cents per share, on the basis of 17 rights shares for every one hundred existing shares outstanding and two free detachable warrants for every five rights shares subscribed (“Warrants”). The Warrants, which have a 3-year maturity date, are exercisable at maturity at an exercise price of 54 Singapore cents per
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Blastoff
Elite |
27-May-2009 13:37
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The stock will start trading at 1400. |
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thomas_low
Veteran |
27-May-2009 13:32
Yells: "Gong Xi Money Made" |
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start queuing now, stagged pattern maybe...? There will be alot of people kena...jackpot or bottom of the pot. | ||||
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zanetti
Member |
27-May-2009 12:19
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x 0 Alert Admin |
sad to say i'm on contra... hope to get rid of it once it resumes trading | ||||
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