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03-11-2017, 01:44 PM
(This post was last modified: 03-11-2017, 01:46 PM by cif5000.
Edit Reason: Update table
)
(02-11-2017, 02:55 PM)weijian Wrote: It seems like the corporate exercise is a 3 for 5 "bonus" issue, announced yesterday.
http://infopub.sgx.com/FileOpen/UnUsUaL%...eID=476463
As usual, the unusual thing about this would be the "3 for 5" number that ignores fractional entitlements.
Assume a hypothetical company that has 1 major shareholder A and 3 OPMIs - B/C/D (each with same shares) and they do similarly announce a 3-for-5 bonus issue:
Original share count (%) Bonus entitlement (share count) Share count after bonus issue (%)
A 208 (79.39%) 124 208+124 = 332 (79.81%)
B 18 (6.87%) 10 18+10 = 28 (6.73%)
C 18 (6.87%) 10 18+10 = 28 (6.73%)
D 18 (6.87%) 10 18+10 = 28 (6.73%)
Total 262 (100%) 10 18+10 = 28 (6.73%)
After the bonus issue of 3-for-5, major shareholder A miraculously own 0.42% more of the company now, with no extra money required. Is that UnUsual?
Since Unusual shares (share count: 643,237,059) are traded in lots of 100 and there are no shareholders with less than 100 shares, the dilution due to elimination of fractional entitlements is not as severe as the hypothetical company.
Just by a 10x increase in share count, the problem miraculously disappears.
Original share count (%) Bonus entitlement (share count) Share count after bonus issue (%)
A 2080 (79.39%) 1248 2080+1248= 3328 (79.39%)
B 180 (6.87%) 108 180+108 = 288 (6.87%)
C 180 (6.87%) 108 180+108 = 288 (6.87%)
D 180 (6.87%) 108 180+108 = 28 (6.87%)
Total 2620 (100%)