Since KINSTEL has 62% or 173m of PERWAJA-LA, its net asset value should increase by another 17 sen after restructuring.
This is why. Based on the proposed restructuring plan, after a reduction of 30% of PERWAJA-LA of nominal value RM1.00 to RM0.70 a piece, every 1 PERWAJA-LA will be converted into 3.5 new Perwaja shares @RM0.20. Currently the PERWAJA mother share price is RM0.290, so PERWAJA-LA will be worth RM1.02.
173m x RM1.02 = RM178m. This is almost the current market capitalization of KINSTEL. Divided by share base of 1,029 million shares, this gives an extra value of 17 sen per share.
This company is saddled with massive debts to the tune of about a few billions, with gearing ratio of 17 or 18 times. How can it ever can return to profitability, especially in times of bad steel market? Besides, its bank facilities are all frozen and have difficulty of paying staff salary, as reported in last Saturday Starbiz. And also burdened by their corporate guarantee of a large portion of Perwaja's bank borrowing. Please be cautious in your investment in this counter, at your risk.
oh ya..sell when other people too eager to buy...Steel definitely is a good and booming sector post Budget 2016...Husni already said it ..DEVELOPMENT EXPENDITURE..
as contrarian..i am always inside when other people outside..based on my limited knowledge..buy steel when its too green..coz..once its too red..the Steel will go up..logic..nak panaskan besi ke panas..betul betul panas..so MERAH baru Steel jalan..so bila waktu terlalu hijau..mereka steel hybernate..tapi ..tak lama dah market nak terlalu hijau..it will kembali merah..:)...ooops...:)
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Posted by supernova > 2015-07-15 16:11 | Report Abuse
not everyone aware the announcement