Is this a stock split? Or something more sinister?
Discussion
Hi all,
After running some screens, i started looking into a company called Pentamaster International who are Malaysian, listed in Hong Kong.
They were ticking all the boxes until i started reading the recent corporate announcements (RNS if you will) and came accross this, which im hoping someone smarter than myself could tell me their intent? The share price is 1.7 Hong Kong Dollars, so its not as though its crying out for a share split.
Anyone got any idea what advantage this would have for the company? It looks like a share split but i cant workout why.
Massive thanks in advance.
After running some screens, i started looking into a company called Pentamaster International who are Malaysian, listed in Hong Kong.
They were ticking all the boxes until i started reading the recent corporate announcements (RNS if you will) and came accross this, which im hoping someone smarter than myself could tell me their intent? The share price is 1.7 Hong Kong Dollars, so its not as though its crying out for a share split.
Pentamaster said:
The Board proposed a Bonus Issue of Shares on the basis of one (1) Bonus Share for every two
(2) existing Shares held by the Qualifying Shareholders whose names appear on the register of
members of the Company on the Record Date. The Bonus Shares to be allotted and issued will
be credited as fully paid at par by way of capitalisation of an appropriate amount of the share
premium account of the Company. The register of members of the Company will be closed from
Friday, 18 June 2021 to Tuesday, 22 June 2021, both days inclusive, to ascertain the entitlement
of the Shareholders under the Bonus Issue.....
...Assuming that no further Shares will be issued or repurchased on or before the Record Date, on
the basis of 1,600,000,000 existing Shares in issue as at the date of this announcement, it is
expected that a total of 800,000,000 new Shares would be allotted and issued under the Bonus
Issue, representing 50% of the existing issued share capital of the Company as at the date of this
announcement, or 33.33% of the issued share capital of the Company as enlarged by the Bonus
Issue. Upon completion of the Bonus Issue, there will be a total of 2,400,000,000 Shares....
...For those Overseas Shareholders, enquiry will be made by the Board pursuant to Rule 13.36(2) (a)
of the Listing Rules. Upon such enquiry, if the Board is of the view that the exclusion of the
Overseas Shareholders is necessary or expedient, the Bonus Shares will not be granted to the
Excluded Shareholders. In such circumstances, arrangements will be made for the Bonus Shares
which would otherwise have been issued to the Excluded Shareholders, if any, to be sold in the
market as soon as practicable after dealing in the Bonus Shares commences. Any net proceeds of
sale, after deduction of expenses, will be distributed in Hong Kong dollars to the Excluded
Shareholders, if any, pro rata to their respective shareholdings and remittances therefor will be
posted to them, at their own risk, unless the amount falling to be distributed to any such persons is
less than HK$100.00, in which case it will be retained for the benefit of the Company...
The full release can be found here https://pentamaster.com.my/wp-content/uploads/2021...(2) existing Shares held by the Qualifying Shareholders whose names appear on the register of
members of the Company on the Record Date. The Bonus Shares to be allotted and issued will
be credited as fully paid at par by way of capitalisation of an appropriate amount of the share
premium account of the Company. The register of members of the Company will be closed from
Friday, 18 June 2021 to Tuesday, 22 June 2021, both days inclusive, to ascertain the entitlement
of the Shareholders under the Bonus Issue.....
...Assuming that no further Shares will be issued or repurchased on or before the Record Date, on
the basis of 1,600,000,000 existing Shares in issue as at the date of this announcement, it is
expected that a total of 800,000,000 new Shares would be allotted and issued under the Bonus
Issue, representing 50% of the existing issued share capital of the Company as at the date of this
announcement, or 33.33% of the issued share capital of the Company as enlarged by the Bonus
Issue. Upon completion of the Bonus Issue, there will be a total of 2,400,000,000 Shares....
...For those Overseas Shareholders, enquiry will be made by the Board pursuant to Rule 13.36(2) (a)
of the Listing Rules. Upon such enquiry, if the Board is of the view that the exclusion of the
Overseas Shareholders is necessary or expedient, the Bonus Shares will not be granted to the
Excluded Shareholders. In such circumstances, arrangements will be made for the Bonus Shares
which would otherwise have been issued to the Excluded Shareholders, if any, to be sold in the
market as soon as practicable after dealing in the Bonus Shares commences. Any net proceeds of
sale, after deduction of expenses, will be distributed in Hong Kong dollars to the Excluded
Shareholders, if any, pro rata to their respective shareholdings and remittances therefor will be
posted to them, at their own risk, unless the amount falling to be distributed to any such persons is
less than HK$100.00, in which case it will be retained for the benefit of the Company...
Anyone got any idea what advantage this would have for the company? It looks like a share split but i cant workout why.
Massive thanks in advance.
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