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Jaks - Winner Andy Ang
Jaks had announced the details of its warrants subscription. You may refer to the announcement here:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6005573
Subsequent to the listing of Jaks' renounceable rights issue of warrants (Jaks-WR), Jaks' share price had crumbled from 82 sen (being the closing share price on the day before listing of Jaks-WR) to 49 sen (being closing share price on the last day of acceptance and payment for the warrants). This 40% fall in share price had rendered the warrants unattractive to entitled shareholders as each warrant costs 25 sen with an exercise price of 64 sen.
Mr. Koon Yew Yin, who was formerly the largest shareholder of Jaks, did not subscribe to the warrants. In fact, by his admission, he is now no longer a shareholder of Jaks.
The clear winner of this warrant issuance exercise is CEO Andy Ang. I am of the opinion that this warrant issuance exercise is in no way a true fund raising exercise. It is an exercise to serve AA's personal purposes.
#1. AA had successfully forced KYY to exit Jaks
#2. AA had cleverly timed this warrant issuance exercise expecting KYY to sell his shares in the open market thus driving Jaks' share price down. AA needed this share price fall to happen to ensure a low subscription of the warrants. And indeed he had achieved that with a subscription rate of 37.52%.
#3. Assuming full conversion of the warrants in the future, AA will increase his percentage shareholding at a relatively cheap entry cost of 25 sen per share. Here is how it is done:
Total number of Jaks' issued shares = 545,943,372
Total number of Jaks' shares held by Andy Ang = 49,654,102 (latest disclosure dated 13 June 2018) i.e. 9.10% shareholding
Number of Jaks' warrants entitled for subscription by Andy Ang = 24,827,051 (disclosures dated 23 November 2018 and 29 November 2018 indicating that he did not dispose any Jaks-WR)
Assuming that all warrants subscribed are exercised in the future, the total number of Jaks' issued shares will increase to 648,371,802 shares. Post warrant exercise, this will increase Andy Ang's shareholding to 74,481,153 shares representing an effective shareholding of 11.49%.
(Note: The above numbers are based on disclosures made by Andy Ang on shares held in his name only. It is possible that he has more shareholding held in the names of nominees).
The 2nd winner of this warrant issuance exercise are shareholders who never had the intention to subscribe to their entitled warrants. A relatively low subscription rate of the warrants translates to a significantly lesser dilution effect. Here is a simple calculation based on a minority shareholder's shareholding of 1,000,000 shares or 0.183% shareholding.
Had the warrant subscription rate been 90%, the enlarged number of issued shares (assuming full exercise of warrants) will be 791,617,889 shares. The 1,000,0000 shares held will now represent only 0.126% shareholding. That's a dilution of 31.1%.
Now that the warrant subscription rate is only 37.52%, the potential enlarged number of issued shares is 648,371,802 shares. The 1,000,000 shares held will now represent 0.154% shareholding. The worst case scenario potential dilution is now only 15.8%.
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Be the first to like this. Showing 43 of 43 comments
y Alex™ > Dec 13, 2018 07:47 PM | Report Abuse
Rights issue no ppl subscribe, how to fund the business?
=============
Shareholders fund > $ 800 million
net current assets > $ 300 million
that is how they fund their business.
They raised $ 250 million in the last year.
2018-12-13 19:51
There are more Cash Call by RI coming again since there is such a shortfall
These are the reasons why Jaks will be insolvent later:
1) Jaks faced Rm50 Mil fine by Star Media
2) Evolve Mall bleeding losses
3) More fines due to LAD (Late Delivery) for Star Building
4) Legal fees piling up trying to postpone Court Verdict
5) High Payables of Rm840 MILLIONS
6) Receivables now Up by another Rm100 Millions to over Rm450 millions
(The danger of China Partner failing to pay (All IOU)
7) High Interest from Bank Borrowings of over Rm400 MILLIONS
Despite disposing Assets for Rm144 millions cash, PP to raise cash & this RI shortfall Jaks still remain a bleeding enterprize
The Completion of Viet Power Plant is still 2 long years away or 8 quarters of reporting
I think Jaks will now BREAK THE 40 SEN SUPPORT OF DECEMBER 16 2014
SELL AND DON'T LOOK BACK!!!
2018-12-13 19:58
Alex,
Current ratio is decent af 1.26
—————
Posted by Alex™ > Dec 13, 2018 07:47 PM | Report Abuse
Rights issue no ppl subscribe, how to fund the business?
2018-12-13 20:05
Alex,
I think david_tan made a good point when he said this is not a true fund raising exercise
2018-12-13 20:14
y calvintaneng > Dec 13, 2018 07:58 PM | Report Abuse
There are more Cash Call by RI coming again since there is such a shortfall
These are the reasons why Jaks will be insolvent later:
1) Jaks faced Rm50 Mil fine by Star Media
2) Evolve Mall bleeding losses
3) More fines due to LAD (Late Delivery) for Star Building
4) Legal fees piling up trying to postpone Court Verdict
5) High Payables of Rm840 MILLIONS
6) Receivables now Up by another Rm100 Millions to over Rm450 millions
(The danger of China Partner failing to pay (All IOU)
7) High Interest from Bank Borrowings of over Rm400 MILLIONS
===========
1) Set aside as Fixed deposit already. Not included in the $ 140 m cash shown in the balance sheet
2) accounting losses , minus the depreciation, cashflow impact minimum
3) Full provision of $ 35 million done.
4) small
5) a portion of that $ 800 million is related to Vietnam which is to be set off against other accounts. No cashflow implications.
6) same as 5).....
7) Long term loan of $ 300 m vs Investment properties ( evolve Mall) $ 650 million book value.
Sell off the Mall at $ 400 million, take a $ 250 million loss... .can still get back $ 100 million cash.....no problem...Shareholder funds > $ 800 million.....net gearing 0.24 X.
2018-12-13 20:20
I think AA sells above $1 to fund his warrants.....it starts the crack.....
It makes sense for AA to swap shares into warrants.....market looking bad and he not very rich one.....
2018-12-13 20:28
why do I get the feeling some people would want to promote the Jak W so hard?
If u r looking at Jak buy the mother share. If it raises enough and the warrant trades at a good price u can switch to warrants. My advice is stay away if it list around 20 to 25 sens assuming Jak price is around 46 sen.
Warrants usually trade at higher premium when it get listed and taper to normal after a few months. Pls be careful and good luck.
2018-12-13 20:41
lizi,
Got to read this article with david_tan previous article. Share price down because KYY sold his shares. But KYY sold his shares because Andy Ang planned this warrant to force KYY to sell. If KYY doesnt sell, then KYY must buy the warrants. If KYY doesnt sell and doesnt buy warrant, then KYY will get diluted.
—————
lizi how u know share price drop is because of AA and not uncle disposal?
13/12/2018 20:23
2018-12-13 20:49
Andy?
Go see top 30 shareholders of Jaks
24 out of 30 or Top 80% are holding by PLEDGED ACCOUNTS OR MARGIN LOANS FROM IB BANKS AT HIGH INTEREST
UNCLE KOON HAS DISPOSED ALL
NOW IS ALP TURN TO FACE
1. MARGIN CALLS
2. CALL CALL FROM EXERCISING RIGHTS ISSUE
IF JAKS PRICE CHRASH FURTHER WILL IB RECALL MARGIN LOANS?
IF ANG CANNOT SUSTAIN WILL THERE BE ANOTHER FORCE SALE AND LIMIT DOWN?
BETTER THINK CAREFULLY AND DON'T GAMBLE BLINDLY
2018-12-13 21:24
Naive?
People in ifca, sumatech, Vsolar called me worst names
In the end of the end game?
More than 90% lost out and disappeared from i3 forum and no longer posting
2018-12-13 21:47
THEY STRIKE IT RICH and retired .....no need entertain STRONGMAN
Posted by calvintaneng > Dec 13, 2018 09:47 PM | Report Abuse
Naive?
People in ifca, sumatech, Vsolar called me worst names
In the end of the end game?
More than 90% lost out and disappeared from i3 forum and no longer posting
2018-12-13 21:50
Hahaha
They were deceived by Satan like in losing rm280k in sendie
Great Satan mortally wounded.
THE final curtain will come soon
2018-12-13 22:19
calvintaneng, you give buy call on quarter of all Bursa counters and sell call on another quarter. Law of probability sure you will kena a few correct calls.
Like that also proud?
—————
calvintaneng Naive?
People in ifca, sumatech, Vsolar called me worst names
In the end of the end game?
More than 90% lost out and disappeared from i3 forum and no longer posting
13/12/2018 21:47
2018-12-13 23:31
Proud?
Pride goes before a fall
Better be humble and listen to admonition
2018-12-13 23:43
very misleading.
nowadays it is standard by most IB.
you deposit cash and open account, you are automatically given the margin whether you use or dun use and the terminology used is "pledged accounts" when actually it is not pledged.
IB used it to camouflage those who actually borrowed by making those who did not borrow look like borrow also. So that those who actually borrow wun be embarrassed.
you must have been living in some monastery for too long.
//////24 out of 30 or Top 80% are holding by PLEDGED ACCOUNTS OR MARGIN LOANS FROM IB BANKS AT HIGH INTEREST ////
2018-12-13 23:50
/////24 out of 30 or Top 80% are holding by PLEDGED ACCOUNTS OR MARGIN LOANS FROM IB BANKS AT HIGH INTEREST ////
good ...genuine investors celebrate ...can get cheap stuffs.
traders should stay away.....
2018-12-14 00:24
cheoky...no need a lot of stocks...One or two investments a year good enough for big money....
margin selling of all major shareholders....where else to find?
2018-12-14 00:30
Satan tries to twist truth like telling lies to deceive Eve
I also use IB and bought shares before. Bought until I am in top 30 shareholders.
Where got pledge account?
So Satan telling lies have lost rm80k in sendie
2018-12-14 00:46
Posted by John_Lee > Dec 13, 2018 09:43 PM | Report Abuse
Calvintaneng is so naive
John Lee, now i remember u....U are in the same category with Calvin if not worse.....seeing yr analysis in Hengyuan earlier.....lol
klse.i3investor.com/servlets/forum/600150907.jsp
2018-12-14 06:48
Who is naive now? David Tan's DCF model to forecast Hengyuan's TP, John Lee's blind support or me?
2018-12-14 07:07
some here really jokers, claiming the RI isssue is to kicked out kyy. If is True, all the more u shouldn't invest. Why? This is crook behaviour. Where u learn your investment from? You never heard about the importance of management in investing.
2018-12-14 11:06
holland..if u are bufalo student, u should celebrate when major shareholders margin call......how else to get cheap shares?
2018-12-14 11:11
Or you dont have open mind consider other people ideas other than your own line of thinking.
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hollandking Really stupid promoter. No common sense
2018-12-14 17:31
Or you just like Jonathan Choi Yi Kit. Only ownself is correct. Everything other than what you believe is wrong.
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hollandking Really stupid promoter. No common sense
14/12/2018 11:08
2018-12-14 17:32
Actually Calvin is right on this. The boss used a lot of margin accounts indirectly held by him. However, the shares were pledged long ago before it ever reached the high prices of the past few years.
This article is kinda dumb. KYY has only himself to blame. He bought into a poorly managed company that doesn't know how to do business. All their businesses are falling apart. Prices were artificially manipulated by KYY's buying in the past. Now that he sold it collapsed. Avoid if you can.
2018-12-15 10:56
Why do everyone assume that only KYY can push the share price of Jaks up?
According to KYY, he only started buying Jaks at RM1.10
If that is the case, then who pushed the share price up up up from 40 sen prior to KYY’s entrance?
Think about it.
2018-12-15 11:46
if you are wallen bufalo, you should be interested in this....whether this is bottom or 30 sen is the bottom...it does not matter to wallen bufalo.
2018-12-15 12:30
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Now all bukak habis baju. Tomorrow Jaks will go up.
2018-12-13 19:34