1. The whole proposal to issue rights issue means there are no issues with the approval of the QA, from Securities Commission, points of view.
Make sense . Agreed
2. The proposed rights issue is one way to address the shortfall of cash plus concern from Securities Commission. I am pretty sure while submitting to SC, they would have consulted with SC, the option to overcome the shortfall.
Make sense . Agreed
3. The proposed rights issue is also a ingenious way to overcome some dissent shareholders (expected 25%) who may rejects the deals and block the whole deals.
Not sure whether RI will "oververcome" dissen shareholders. Dissenting shareholders will vote against to realize their sure profit so unlikely to be entice by the RI.
4. The rights issue is a "reward" to the shareholders. Think about it, you will be getting not less than 30% discount for the rights share plus free warrant.
since all existing shareholders are entitled to whatever discount and price will be adjusted ex right accordingly, there is absolutely no reward to shareholders no matter how large the discount is.
5. As I mentioned before, there share price cannot be traded less than the cash value simply because if that happens, then majority of the shareholders will vote against the deal, even the proceed from the rights issue will not be able to cover the shortfall as I pointed in point 3).
share price had been and is still trading below the cash value. If the price rises to at or above cash value,dissent shareholders will sell and realize their profit sooner and not wait for the money to be returned from the trust ac later. You need a a lot of financial muscle to change the tide, so i think this unlikely. Will the "invisible hand" waste their bullets in doing this??
6. Why would one do rights issue at the low price, resulting is maximum dilution. In addition to that, still give discount not less than 30%.
Bottom line is to raise the target amount of fund needed to bridge the potential gap. High discount tend to mislead a lot of people into thinking they are getting a bargain!! Every single shareholder is getting the same deal, what bargain is there??
7. Secondly, if you think point 4), 5) and 6) make sense, then the share price will go up from current price. The proposed rights issue not only address the funding shortfall but also a way to reward current shareholders.
No rights issue ever design to reward shareholders!
callme777What's the price to be paid to investors if we reject the QA? Is it 0.675 plus interest? How much would that be? Thx
BenBlurBlurSifu mililia Let's say no Right Issue first.. if price push up b4 d EGM to approve QA wil u sell or wil u hold?? What is fair value of Cliq after buying QA? Thank u
mililiaBenBlurBlur: First of all, please don't call me Sifu. I'm learning myself. The answer to your question is all depend. If the share price is only up equal or slightly more than cash value.. Most likely I will keep. Why? Because I wanna hold till ex-date and I will entitle my right. Whether to subscribe or not is different issue. If I don't want to subscribe, I still can sell my right.
But if the share price gone up so high, I will sell and talk later. Probably I can participate it again when the rights is traded and probably I can enter the counter at a cheaper cost through the right.
BenBlurBlurMililia Thank u for ur answer. U sifu la talk logic la.
It look like u think the QA quite good is it?? Thank u