On 17 May the company made the following announcement:
1 Proposed renounceable rights issue of up to 96,480,983 new ordinary shares in Dayang (“Dayang Shares” or “Shares”) (“Rights Shares”) at an issue price to be determined later on the basis of 1 Rights Share for every 10 Dayang Shares held at an entitlement date to be determined later (“Proposed Rights Issue”);
2 Proposed private placement of up to 96,480,983 new Dayang Shares (“Placement Shares”), representing approximately 10.0% of the total number of issued shares of Dayang (“Proposed Private Placement”);
3 Proposed subscription of new redeemable convertible preference shares (“RCPS”) of up to RM455.0 million in Perdana Petroleum Berhad (“PPB”) at the entitlement basis and issue price to be determined later pursuant to the proposed rights issue of RCPS to be undertaken by PPB (“Proposed Subscription”)
Soon after the above announcement, on 22 May, the company announced a small loss in its 1st quarter ending March 2019 due to monsoon which had affected its maintenance operation in the open sea. As a result, the price plunged to 90 sen per share.
Since then the above chart shows that it has been going up from 90 sen to about Rm 1.50 within 2.5 months in spite of the 2 announcements.
The daily volume changed hands is several million shares. The price continues to go higher and higher because there must be more buyers than sellers. The buyers can appreciate the fund-raising exercise. Unfortunately, the sellers do not understand why the company needs to raise more money to do more business.
Why did they are selling their shares?
1 They believes that the controlling shareholders would like to press the price down so that they can buy the right issues (1 for 10) at cheaper prices.
Note: According to SC rule, the company can offer a maximum discount of 30% from the 5 days average price just before the X date for buying the rights.
2 They also believe that the controlling shareholders would like to press the price down to help the Sarawak Government to buy the placement shares of about 96 million shares.
Note: The buyer for the placement shares is not the directors’ cronies. It is the Sarawak Government. According to SC rule, the company can offer a maximum discount of 10% from the 5 days average price just before the X date for buying the placement shares.
My opinion:
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