Does the shares placement means that WCT going to right issue for shareholder? Or just private placement to major sharesholder? Does anyone know and affirmative with?
Private placement is to raise fast funding to expedite its huge orderbook, avoid cost overrun by stockpile or deposit to order ahead some KEY building material in order to safeguard construction profit margin.
Private placement also to avoid dilution through conversion of going expire warrant WD, which Desmond hold nil but formal boss hold substantial stake in both warrant WD and WE.
Private placement is alternative to right share issuance, but carry less time as right issue need EGM approval, and private placement carry less dilution 10% impact and placement is to identified friendly only party or proxy to boss to average down his holding cost, tighten stake with cheaper cost.
Expect the stock price to trend lower for awhile until post ex-date for the WCT-WD warrants.The warrants maturity date is 11 Dec 2017and the exercise price is at RM 1.71 in the ratio 1:1.That to prevent the previous shareholders from exercising at the profits. 2.The Private Placement (PP) exercise announced comes so close to the WD maturity date.It is not a mere coincidence.But a defensive strategy deployed-that is to strengthen the major shareholders grip on the company and as what other forumers have said correctly to allow them(proxies or nominees and friendly parties) to average down their holding price for the stock. 3.Will wait to collect and buy until passed 11 December 2017...
That is my analysis...it may turn out to be not correct.Just to share:-)))
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hng33
20,491 posts
Posted by hng33 > 2017-10-23 16:56 | Report Abuse
Average down holding cost to about 1.57