Apart from holding 80% stake in West Coast Expressway, the company is holding 40% in Rimbayu, a 1879 acres property development in Kuala Langat, which is about 10km away from Kota Kemuning. The development is handled by IJM Land which holds the other 60%. More than 1000 acres of the land has not yet developed. The GDV over the next 10 years in the region of RM10B. The company's holding cost of the land is only rm5+ per sq ft against a market price of more than rm30 per sq ft. Transactions done in the neighbourhood in the past few years was rm33 per sq ft.
Issue price is fixed to such low price, as well as the warrant conversion price. The 3 major shareholders undertaken to subscribe 80 % of the total rights issue. It is to their advantage if minority shareholders do not subscribe. However, full subscription will raise the required fund.
Conversion of RCPS to ordinary share: The conversion prices of the RCPS have been fixed at RM0.28 and RM0.32 under Option 1 and Option 2 respectively (“Conversion Prices”);
(i) Option 1: (with cash payment) By surrendering one (1) RCPS together with cash payment of RM0.04 for one (1) new WCEHB Share; and (ii) Option 2: (without cash payment) By surrendering four (4) RCPS for three (3) new WCEHB Shares.
Unless the mother share drop to 16 cents and below, then rcps holders may use their 4 rcps to convert 4 rcps for 3 mother share under option 2. Otherwise, likely use option 1 for the conversion.
Good - I will buy more if it drops like hell. However, I still have not got an answer on what will happen to WCEHB mother share price? i.e. will the mother share adjusted in any shape or form?
Oops, sorry. Mistake. Two shares at 0.40 each entitled to 4 rights. 4 rights can convert to 3 mother shares. Total sum paid = 0.80+0.96=1.76. Total shares = 5. Hence after ex, shud be 0.35.....neglect one warrant..given. Price up or down after that? Most likely company won't support the ex price cos they already got most of the money... Wakaka..
The 3 major shareholders combined currently holds 61+%. They have collectively undertaken to subscribe up to 80% of the rights issue, splitting among themselves proportionately according to the percentage of their shareholdings. Effectively, each of them will be subscbring in excess of about 30% of their entitlements.
Obviously it is to their advantage if they could get their excess shares which is priced at such low price. They would be able to increase their shareholdings at relatively lower costs.
Not forgetting that, according to my estimate, their average cost per shares ranged from 70 cents, rm1.10 and rm1. 20 respectively. They have been holding at least 5 years. IJM has the lowest cost among them but IJM first bought into the company in 2005 @28 cents and subscribed the rights issue @rm1.08, 3 for 4 in 2014. The other 2 major shareholders also subscribed for the rights in 2014.
You can convert it to the mother share by surrending 1 rcps +4cent for 1 mother share, to the share registrar of the company at anytime during the 2 years tenure of the rcps OR 4 rcps for 3 mother shares. You can also sell it in Bursa as it is also listed and tradable.
The chance is very slim. Even if it happened , I would believe that it will rebound very fast. When the rights issue is completed, it will move to its intrinsic value. This is a long term stock to hold. I believe its value will be reflected towards the completion of the highway in Aug 2021, barring unknown risks.
You should know, every highway, when built, losses money for about 10 years. Before traffic catches up at some point down the line. I can tell you, 70% of highways in Malaysia is effectively bankrupt, its a murderous business that only looks profitable, if you don't see the capex etc properly.
Northern highway growth rates is about sub 1% per year as a whole. Central region is about 2%. Southern region is about 2% as well.
A new highway, can probably hit about 6-7% growth for about 5 years plus before maturing, to 1-2% growth.
Put those assumptions in and tell me what do you think.
For the first nine months of 2016 (9M2016), the NSE registered a moderate 4.4% growth in traffic volume to 13.4 billion passenger car unit-kilometres (PCU-km)
I read that on the NSE, the North bound traffic is actually higher than that of the South bound and the revenue from NSE contributed to 80% of Plus. I was also told by a reliable source that there are about 100k heavy vehicles or trucks on the NSE daily. Considering that WCE has a flatter terrain and is running from port to port, about 83 km built by the government is toll free, wouldn't it attract good traffic to it.
We wouldn't have more info than the 3 major shareholders who has invested heavily into the company and now are prepared to fork out hundreds of million to subscribe for their entitlements and even undertaken to subscribe for excess shares up to 80%.
So many bidders for Plus. WCE is a smaller version of the crown jewel in Plus, the NSE.
NSE, contributed 80% of the revenue of Plus. Plus' 1270Km, which was bid for about RM34.9B EV. NSE being 80% revenue contributor should value at RM28 B WCE, total length 233 KM+83km, costs RM 6.69B
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....
uptrending
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Posted by uptrending > 2019-10-07 14:06 | Report Abuse
Already in the posts above