Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Saturday, January 8, 2011

Hap Seng Cons. Bonus 2:1. Rights Issue + Warrant 1:5

Hap Seng Consolidation Bhd plans to raise about RM1.46 billion: the details:-
a). Private placement abt 124 m shares @ RM6.43 (10% to RM7.21)
b). Proposed bonus issue of 1.494 billion new shares: two for every one held
c). Thereafter rights issue of 448.31 m new shares @ RM1.46 with 448.31 m free detachable warrants: one RI + one W for every five shares held
An approximate guide: -----> If you buy/hold 10,000 shares x RM7.30 = RM73,000
then adjusted price after bonus issue: 30,000 shares x RM 2.433 = RM73,000
thereafter rights issue (30,000 shares x RM2.433) + (6,000 x RM1.46) = 36,000 x P + 6,000 W
If you assign W = RM0.40, then P = RM 2.038 or RM2.00 range


ccdev said...

man, how do you get the theoratical ex warrants price? how does the free warrants effect the ex price of the share?

Remnant 613 said...

HSC and Bursa has not furnish details or estimated "value" of its warrant so what I suggest is a simple guide.

Ex-price of share is affected by the warrants as per equation posted.

Other factors are conversion/exercise price and expiry date.

Alex Lu may heve the details of warrants "value", expiry date and conversion.