I think they will announce the award of a new contract first (hopefully MRT 2 related), then fixed the PP price.

That was what they did in 2014.
1) Announce the award of RM350mil rapid project on 11th June 2014 (price jump from 1.71 to 1.86)
2) Fixed the price of the private placement on the 27th June 2014 ( fixed the PP price @ 1.68, 10% discount of the 5 day average price)
3) list the private placement on the 4th July (share price adjusted by 2 cents on the opening to RM1.84)

Feel free to check the historical announcement. Good luck.

Don't want to wait for the contract?? They will most probably get at least the selangor state portion.

Guys,

actually the dilution effect on the share price should not be 10% since the investor of the private placement will need to put in money into the company. Below is my calculation (i am assuming a share price of RM2 pre placement for the sake of simplicity)

Pre PP: Share price = RM2; Share outstanding = 235 mil ==> Mrkt Cap = RM470mil

PP offer: Share price = RM1.8 (10% discount); Share outstanding = 23.5mil (10% of shares outstanding) ==> RM42.3mil

Post PP:

Pre PP Mrkt Cap + PP = RM470mil + RM 42.3 mil = RM512.3mil

Shares outstanding = 258.5 mil

==> Share price post PP = RM512.3 mil/ 258.5 mil = RM1.98

Which is only 1% discount. Is my calculation correct? Appreciate any feedback.

Thanks guys

I have a feeling that Credit Suisse will probably vote no just to get a return of 7-9% (assuming the liquidation amount is 48 cents). They have the ability to borrow at a very low cost in Europe. This is actually an arbitrage opportunity for them.

Given the very low borrowing cost there, i would assume they will be using a lot of debt to collect the shares. When u leverage 90% of ur holdings for example, a 1% increase will actually becomes 10%.

Saw that management managed to get the reduction in price of the QA. Good for the shareholders. Hope this will benefit everyone. :)

Just remember that there will be dilution effects when and if warrant holders convert to shares.
Good luck..

Agree with hionghiongki. Trade cautiously. I think it would be better to wait for the announcement. Buying now might be risky.

If delay should go back down until the next deadline... If deal to go through, price would go up before the deadline. Better wait for that rather than going in now...

If cancel, probably will go back to 40 sens level.

Acquisition has likely broken down... If this is true, price will go down back to pre acquisition anouncement, around 40 sens.....

Due diligence process around 9 months.. Soo long!!
How sure will go through this time???

In the mean time will need to face 3 quarterly reports. Knowing management, result won't be that great which might effect the stock price.

Better wait first.....

Still no announcement....Looks like the deal is off.
Unless they extend the deadline again, just be prepare for a sharp fall in price....

Down....down....down.....Boom!

Lee Yih, Shell holding decided to sell thei 51% in Shell Refinery to Malaysia Hengyuan International Ltd for only RM1.80 per share.

On top of that the refinery will need to spend a large amount of capex to comply to Euro4 and Euro5 regulation requirment.

Another issue at hand is the large amount of debt that the company has. 450mil due in june and another 950mil in sept.

All of this will need cash and the company dont really have enough right now.

Becoz of this there is a high possibility of future cash call. Given that the Chinese bought it at around rm1.80 only, cash call should he price around that region if not at a discount.

For those that opt not to participate, they will see a steep dilution to the stocks they hold...

Hard to see any bright side if u are a minority in the company.....

Looks as if the deal will be aborted. Already delayed a couple of time. If canceoled, price will go back to pre deal news which was around 30-40 sen.

This stock will just go down to 1.80 region.

Just remember that once the qa is approved, warrants can also start to be converted. Potential dilution effect to those shareholders who do not hold any warrants.

Warrant holders would want the QA to be approved. Without QA, their warrants would be worthless..

You can refer to Cliq warrant. Now RM0.005.

QA price is overprice. Better take the money and invest in cheaper o&g stock directly.vIf management don't get a big discount, most shareholders would vote against it. How much will shareholders get if they reject the acquisition?

450mil debt due on june and another 1bil in september. Unless the refinery can raised money via refinancing or cash from operation, investors are expected to pump in more money to pay the debt. So expect a right issue i guess.......

Wow. So depressing!