I actually still retain a portion, opting to receive special dividend instead of selling the entire holding which incur transaction cost. I just treat the remaining portion as cash, to be deployed if new opportunities arise. I also keep an eye for price after ex date, just in case the price gap becomes attractive.
According to company announcement on Oct 13, LITRAK Holdings’ portion of total equity holders’ proceeds RM2,739m. After full exercise of ESOS the number of shares will be 538.263m. Value per share = 2,739/538 = RM5.09.
Before today's ex-date, the share price has traded around RM5, which was about 10 sen or 2% discount before transaction cost.
After ex-date the remaining value is about 5.09 - 4.57 = RM0.52. The volume weighted average price up to this moment is about RM0.50, which is about 2sen or 4% discount.
It seems a fair discount. There is little attraction to buy or sell at this price.
everyone is wrong here. the capital repayment will be a minimum of RM0.535 within 11 months. read the completion announcement where it says the actual amount received is RM2739 million, which is RM8 million higher than the amount stated in the circular previously of RM2731 million.
the circular also says any future interest income has not been calculated in yet. litrak has around RM200 million cash now after paying the special dividends. at an interest rate of around 3%, that would add another 1sen in 11 months time. that's why i say minimum RM0.535 but investors can expect RM0.545 in 11 months time. this is why there was a big wave of buying below 50sen yesterday.
Yes, the cash in bank generates interest. So is money parked in FD instead of chasing after Litrak shares. Moreover companies pay 25% corporate tax for their interest income while our own FD interest is tax free.
Even a holding company still incurs expenses. Up to probably a million a year for directors’ remuneration. There is also staff cost, though it could be minimal. They may also engage advisors/ consultants in winding down the company. This overhead has to be spread over a company which is now only a tenth of its previous size. The cash return will be smaller after offsetting the various cost.
This is why I feel that a few percent discount, to be realized within a 12 month period, is merely fair instead of attractive. Any gain in arbitrage has to be measured against the opportunity cost incurred.
observatory, it shows that you did not read the circular. all those expenses have been taken into account and deducted when they estimated the RM5.09 total. they even estimated RM4.7 million for all remuneration, not RM1 million like you think.
observatory, hahaha. you seem like you can analyse but i wonder how you can miss out pg 18 when you seem to have seen pg 16 and pg 19.
it wouldn't take a genius to point out that you omitted the non-disposal cash in hand that litrak has. this is mostly from esos conversion over the years until now. this is RM39 million as pointed out in pg 18. all esos with exercise price of RM5.02 were not exercised so scenario 1(a) in pg 18 is not relevant. scenario 1(b) is the relevant one.
and btw, its not 539 million shares. its 541.46 million shares now.
go on and recalculate. the amount i get is RM0.543 and that does not include any future interest income. lets see if you can pull out something "different" now.
Yes, I missed out page18. The calculation would have been a lot simpler by just taking the originally stated RM5.09 and add the interest accrued as announced on Oct13. I'm glad that by posting my calculation it attracted correction. It looks like I can afford to sit on the share a lot longer.
Csan, welcome back. Haha, of all people, you're the one advising others not to be sarcastic? But still I appreciate your earlier warning that the deal may fall through and Litrak may have to dispose at a lower price. Despite the scenario never came true, caution was still warranted. No, I'm not in denial. What for? Both denial and pride are just unnecessary emotional baggage.
observatory, yes i actually took profit for most of my holdings at around RM4.90 and kept the rest. could have earned a little bit more if i had kept it all. and no, RM5.09 + interest accrued is not correct. it should be RM5.09 + additional RM8 million due to delay in completion + interest accrued. overall, it should not be a surprise if we get around RM0.55 in 11 months time.
just88, its capital repayment after liquidation. and what other assets does litrak have now other than cash in trust account? lol
Not to dampen the high expectation of return as shown by many of you, may i take a cautious views to draw your attention on the following matters Upon completion of disposal on 13/10/22, 1. Compensation receivables (80.5M) - this amount is still pending certification by Malaysian Highway Authority. EGM circular says "If the Government of Malaysia actually settles less than the amount receivable shown in this Circular for any reason, then the relevant Concession Holding Company bears the full risk of this shortfall. 2. Retention sum (20.5M) - uncertain whether there is any warranty claim (retention period will only expire on 31/1/13)
Anyway, i do hope that there is no significant impact on capital repayment should the above events unfortunately occur. Note: EGM Circular Pg 118 refers
taitaumau, the circular also says that the actual amount received compared to the estimate has always been +-5% historically. The future interest income should cover for any shortfall. and if i am not mistaken, there is also a WACC return on that retention sum that ALR has to pay to Litrak.
No, its asset is 100% in cash, but only 90% of the cash is in designated trust account which can only be distributed to shareholders or acquiring new business. Balance is in normal bank account under BOD's free control.
Csan, the regulation stipulates that at least 90% cash in hand must be placed in a designated trust account. Could be more than the estimated future expenses. Need to wait for the next results to see the trust amount.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....