Following Keppel Land’s earlier proposal of a Rights Issue, they have received in-principle approval from SGX for the listing and quotation of the Rights Shares on the Main Board of SGX-ST.
Key dates are as follows:
Last day of “cum-rights” trading of Keppel Land – 11 May 2009
First day of ex-rights trading for the Rights Issue – 12 May 2009
Commencement of “nil-paid” Rights trading – 19 May 2009
Last day of “nil-paid” Rights trading – 27 May 2009
Last day of acceptance and payment for Rights Shares – 2 June 2009 at 5pm (930pm for electronic)
Expected date of trading of Rights Shares – 12 June 2009
Those who own Keppel Land shares at the close of market on 11 May 2009 will be entitled to the Rights.
Each existing Keppel Land shareholder will be entitled to nine Rights Shares at an issue price of $1.09 for every ten ordinary shares of Keppel Land that they hold.
If Keppel Land trade at $2.78 (today’s price) on 11 May 2009, the theoretical ex-rights price on 12 May 2009 will be
(2.78 x 1000 + 1.09 x 900)/1900 = $1.98
Based on a price of $1.98, the Rights should trade at around 1.98-1.09 = $0.89
Shareholders will have these options:
1) Sell off their Rights at the prevailing market price
2) Pay $1.09/Rights to “convert” all their Rights into ordinary shares
3) Pay $1.09/Rights to “convert” all their Rights into ordinary shares and apply for excess Rights Shares
4) Pay $1.09/Rights to “convert” some of their Rights into ordinary shares and sell off the rest of their Rights
Doing nothing is not a wise option as it simply means you have not made use of option 1 which was available to you.
67 comments
askxyz says:
May 7, 2009 at 8:21 pm (UTC 8)
Hi,
Ho do I apply for excess rights? If I only buy 1 lot, how many excess rights can I apply for?
Thanks
lioninvestor says:
May 7, 2009 at 10:27 pm (UTC 8)
Hi askxyz,
You will be given 900 Rights. You can apply for as many excess rights as you have the money.
How much you get will be based on allocation. Priority will be given to odd lot holders.
askxyz says:
May 7, 2009 at 10:32 pm (UTC 8)
Hi lionvestor,
Thanks for your reply.
What is odd lot? 1,3,5 lots? Why prioroty to odd lot holders?
lioninvestor says:
May 7, 2009 at 10:53 pm (UTC 8)
Odd lots means not in denominations of 1000 shares.
Priority given to odd lot holders and directors, substantial shareholders will rank last…
Adrian Chua says:
May 11, 2009 at 10:53 am (UTC 8)
When can I apply for the remaining excess rights? I just bought 1 lot.
lioninvestor says:
May 12, 2009 at 10:26 am (UTC 8)
Hi Adrian,
The last day for acceptance and payment for your Rights Shares is 2nd June 2009.
Adrian Chua says:
May 13, 2009 at 10:42 am (UTC 8)
Thank U!
Jimmy Yeo says:
May 12, 2009 at 2:06 pm (UTC 8)
Hi Lion Investor,
Do you have KeppelLand Right Offer document ? Would you be able to share with us ?
lioninvestor says:
May 12, 2009 at 2:25 pm (UTC 8)
Hi Jimmy,
There you go:
http://www.martinlee.sg/code/uploads/keppel-land-rights-ois.pdf
Jimmy Yeo says:
May 12, 2009 at 4:23 pm (UTC 8)
Thank you very much for your kind assistant
askxyz says:
May 14, 2009 at 2:32 am (UTC 8)
If I don’t have any shares in kepland, would I be able to purchase the rights? Where to purchase and how much would it cost?
lioninvestor says:
May 14, 2009 at 12:38 pm (UTC 8)
The Keppel Land Rights will be traded from 19-27 May. Look out for the counter Keppel Land R. Market forces will determine the price.
Note that when you buy the right from the open market, you are not eligible to subscribe for excess rights.
alice says:
May 25, 2009 at 9:29 pm (UTC 8)
Hi lioninvestor,
“Note that when you buy the right from the open market, you are not eligible to subscribe for excess rights”
I dont own any keppel land share. I intend to buy rights from open market and then settle payment for these rights as well as apply excess rights on atm. I was told by my broker that i can buy rights from open market and use that to apply for excess rights.
But you mentioned that we cant do so, I am quite confused. can you clarify/elaborate more on this matter? where can i get the written information from? or any number to contact for clarification?
many thanks for your sharing.
rgds,
alice
lioninvestor says:
May 25, 2009 at 10:56 pm (UTC 8)
Hi Alice,
You can certainly do that, but you won’t be given any excess.
http://www.martinlee.sg/code/uploads/keppel-land-rights-ois.pdf
Look at the definition of entitled shareholders (page 39)
Purchasers of rights fall under 2.5 (page E-4)
alice says:
May 25, 2009 at 11:17 pm (UTC 8)
Hi lioninvestor,
I appreciate your prompt response and generous sharing of your knowledge. Thank you!
Best rgds,
alice
Lawrence says:
May 15, 2009 at 12:57 pm (UTC 8)
Hi! May I know if I purchase rights from the market during trading day, how can I convert to share if I don’t owned any mother share?
Tks
lioninvestor says:
May 15, 2009 at 9:46 pm (UTC 8)
Hi Lawrence,
if you purchased the rights, you can just convert them as what the other rights owners do, ie sending in the subscription form or via atm.
Whether you own mothershare or not is irrelevant after ex-rights date.
Lwarence says:
May 19, 2009 at 1:34 pm (UTC 8)
Thank you for your reply Sir. Am I right to say that I have pay 1.09 x 1000 (each lot) + rights (S$..) to convert into share?
Lawrence
lioninvestor says:
May 19, 2009 at 10:49 pm (UTC 8)
Yes.
Technically, buying the rights and paying for converting should cost around the same as buying the mother share directly.
If there is a difference, people will arbitrage.
askxyz says:
May 16, 2009 at 1:51 am (UTC 8)
Hi,
If I bought the rights at 0.4cents, how much will the value be when converted to shares? If I bouguht 5 lots of rights, that means I will be paying only $2000?
Regards,
Jeremy
lioninvestor says:
May 16, 2009 at 9:38 am (UTC 8)
Hi Jeremy,
After you have bought the rights, you will still need to pay $1.09/right to convert them to normal shares.
askxyz says:
May 16, 2009 at 5:55 pm (UTC 8)
Is it more worth buying from the main shares than to buy from rights? Would you be able to show us the difference?
Win says:
May 20, 2009 at 1:59 am (UTC 8)
Hi lioninvestor,
(1) I have 5 lots of mother on 11/05, so am I right to say that I will definately get 4,500 lots of rights ?
(2) If yes, when can i start trading my rights ?
(3) Notice that yesterday (19/5) the rights are already started trading, does that means that I can start selling even I yet to receive letter from KL ?
(4) If I don’t intend to convert all the given rights (4,500 lots) to mother, can i still apply for the excess right ?
Thanks + Best regards,
Win
lioninvestor says:
May 20, 2009 at 9:36 am (UTC 8)
Hi Win,
1) Yes, as long as you didn’t sell them before trading closed on the 11 May. 4500 shares of rights (not lots).
2) 19-27 May
3) Yes
4) Do you mean you want to sell some rights, convert the rest and then apply for excess? I am not so sure about this. Why don’t you sell the mother share, take up your full entitlement of rights and then apply for the excess?
zeejay says:
May 21, 2009 at 11:01 pm (UTC 8)
Hi,
I am entitled to 900 Rights Issues.
1) If I wish to buy them, can I do it through online banking (EPS) besides submitting the form or via ATM?
2) What is Excess Rights? What are the benefits?
Regards
ZJ
lioninvestor says:
May 22, 2009 at 11:43 am (UTC 8)
Hi ZJ,
You either do it by mailing in the form with the cashier’s order, or applying directly via atm.
Applying for excess rights means you are applying to buy additional Keppel Land shares for $1.09/share. How much you receive will depend on demand/supply.
Since Keppel Land is trading above $1.09 now, getting any excess would be profitable.
zeejay says:
May 22, 2009 at 6:40 pm (UTC 8)
Hi lion,
Thank you for the reply.
One last question: To apply for excess rights is still via ATM? Can I apply the excess in 100s?
Regards
ZJ
lioninvestor says:
May 22, 2009 at 10:34 pm (UTC 8)
Hi ZJ,
You may apply for any amount of excess rights that you are able to fund via atm.
You can refer to this comment for the atm procedure:
http://www.martinlee.sg/capitaland-rights-issue/#comment-10732
It will be similar.
zeejay says:
May 23, 2009 at 8:29 am (UTC 8)
Hi lion,
Very detailed, I like.
Thanks.
Regards
ZJ
gisl says:
May 22, 2009 at 6:07 am (UTC 8)
hi lioninvestor
I’m allocated with 1800 shares of rights, if I intend to sell the rights now, do I still have to subscribe to the rights or pay $1.09/rights after that, or basically do anything at all?
Does the system automatically has knowledge that I own the rights even if nothing is reflected on my securities account?
If I don’t have to pay $1.09/rights after selling the rights, does that mean whatever prevailing mkt px I have managed to sell the rights for would be my earnings?
I’m currently out of the country so I thought selling the rights would be the easier option.
Your help will be greatly appreciated, thank you.
lioninvestor says:
May 22, 2009 at 11:48 am (UTC 8)
Hi gisl,
If you sell your rights, that will be the end of the story.
What is shown in your securities account doesn’t matter, what is important is what is reflected in your CDP account.
You can call them up to double check if you are unsure.
Note that you have until 27 May to sell your rights. Look for Keppel Land R or Keppel Land R 100 (lot of 100 shares).
JT says:
May 22, 2009 at 9:37 pm (UTC 8)
Hi gisl,
Just want to share. I am out-stationed and this is what I am doing.
a. hv CDP acc and activate it for online access. You hv to sign form personally at CDP.
b. open one more bank acc with atm card. transfer money from main acc to that acc. atm card kept by my sis and whenever there is right application, i txt her and she apply for me thru’ atm. I was surprised when unsuccessful excess rights payment was refunded. (this atm card was not linked to securities account)
c. Normal payment for each purchase and sales are done thru’ internet banking.
d. One last thing I need to do when I go back SGP is to open another securities acc becuase when trading traffic is high, the portal slows done a lot, or to avoid the securities firm computer server breakdown. Murphy’s Law gets to work and it happened to me just 2 week’s ago. of course you can email or call them to trade but this is an alternative.
gisl says:
May 23, 2009 at 1:55 pm (UTC 8)
lioninvestor and JT, thanks for your help.
Ryan says:
May 24, 2009 at 9:42 pm (UTC 8)
hi lioninvestor,
I have exercise the rights but if i sell my motherlot now will i still be allocated the rights? Thanks for the help cos I might be interested in CapComm as well..
Rdgs
ryan
lioninvestor says:
May 24, 2009 at 9:45 pm (UTC 8)
Hi Ryan,
Unless you are dealing in odd lots, selling your mothershare now shouldn’t have much impact on your rights application.
Tym says:
May 25, 2009 at 11:09 am (UTC 8)
Hi lioninvestor,
im really glad i came across your blog. and so timing as well.
u see, i have rec my package for Keppel Lands Rights issue. this is my first stock, and im rather confused with this rights issue thinggie.
im entitled 6300 rights issue.
im not too sure what i shld do with them. as i read ur entry and the following q&a, i have a better picture.
but i still have a few qns.
so if i decide to take up all my rights, and keep the shares what does it mean? i pay $6300, and get 6300 shares? via either mail or atm rite? or is it 6300 shares * $1.09 = $6867
and if i want to sell my shares later, how do i settle the odd lot part.
what does it mean to apply excess rights? i can apply for more than 6300 rights?
what does it mean to settle the rights b4 this date 2 jun? or is it shares?
lioninvestor says:
May 25, 2009 at 5:25 pm (UTC 8)
Hi Tym,
If you decide to take up your rights, you have to pay $1.09/right to convert them to shares. You can do it via atm. The process is similar to what I wrote here:
http://www.martinlee.sg/capitaland-rights-issue/#comment-10732
You have until 2 Jun to accept the Rights and make payment, otherwise they will be gone.
Excess rights is like applying for more rights than what is given to you. Basically, you are applying to buy more shares of Kep Land at $1.09/share. You have to pay them the money first. You can apply for as many excess as your funds allow. How much you ultimately get is subjected to balloting.
The odd shares can be sold on the unit market. It is also likely that Kep Land will have a temporary counter to facilitate trading in odd lots.
Tym says:
May 26, 2009 at 12:08 pm (UTC 8)
thanks lion!! you being a great help!!
on a side note, the literature i read seems to point that a rights issue is usually more bad than good, esp. as a signalling theory.
just for more discussion and open thots, what are ur views on this kepland rights issue? while the prospectus did say the issue is for acquistions and growth, the rational behind a rights issue seems to suggest perhaps a weak financial health of the company.
if the whole rights issue is fully taken up, cld the price of the newly diluted shares fall to or even below $1.09? is there a cap on the downside after dilution?
tym
lioninvestor says:
May 26, 2009 at 8:58 pm (UTC 8)
Hi Tym,
Actually, the discounted shares is just an illusion.
A rights is actually a cash call to equity investors. It’s the exact opposite of giving out dividends.
http://www.martinlee.sg/understanding-rights-issues/
Tym says:
May 25, 2009 at 11:42 am (UTC 8)
i notice there 2 counters in SGX for the KepLand Rights:
KepLand R (H1XR)
KepLand R900 (H1WR)
what does it mean? im confused.
if i want to sell all my rights now, do i get 6300 * 0.855(current px 25may09)? and my closing date to sell is til 27 May 09?
all this rights issue thinggie is very confusing for me as im a first time investor. hope i dont screw it up.
lioninvestor says:
May 25, 2009 at 5:20 pm (UTC 8)
Hi Tym,
The R900 is traded in lots of 900 shares.
So, people can buy/sell the Rights in multiple of 900 shares.
Yes, if you want to sell your rights, you have until 27 May to do it.
Alice hew says:
May 26, 2009 at 11:46 am (UTC 8)
Hi morning,
I would appreciate if you could reply me as soon as possible because the closing date is very soon. thanks.
I am a Malaysian and resident in Malaysia. I have 2 lot of Keppel Land (using CPF fund) which entitle for right issue.
I am intented to apply for the right and excess .
Todate, i did not receive any form to apply for it.
How to go about it?
Please help.
Regards
Alice Hew
lioninvestor says:
May 26, 2009 at 9:16 pm (UTC 8)
Hi Alice,
According to page 31 of the offer document, foreign shareholders are not entitled to the rights issue.
http://www.martinlee.sg/code/uploads/keppel-land-rights-ois.pdf
The documents will not be sent to any shareholder with a foreign address registered with CDP.
I suggest you call CDP to double check whether there are any Keppel Land Rights in your CDP account and also how Malaysian shareholders are treated.
http://www.cdp.com.sg/faq/right_faq5.html
CDP Hotline : +65-6535-7511
Monday to Friday 8.30am to 5.00pm
Saturday 9.00am to 12.30pm
Closed on Sundays & Public Holidays
Angeline Ng says:
May 26, 2009 at 12:11 pm (UTC 8)
Hi Sir
(A)
I got 5 lots of Keppel Land and I am entitled to exercise my rights of
4500, does it means I pay $1.09 per share to take up the rights, it automatically becomes a Mother share ?
(B)
If I need to buy in excess of my rights entitlement, how many right can I buy.
For your for (A) & (B) do I pay together or pay separately if I pay thru’ ATM
lioninvestor says:
May 26, 2009 at 9:03 pm (UTC 8)
Hi Angeline,
(A) Yes, you only pay $1.09/share.
(B) You can apply for as many excess as you have the money to do so. How much you eventually get will be subject to the allocation.
Do it together. The process is similar to what I wrote here:
http://www.martinlee.sg/capitaland-rights-issue/#comment-10732
AAW says:
May 26, 2009 at 3:11 pm (UTC 8)
Hi Lioninvestor
Can I buy the excess rights for more than one time through ATM application before the closing date?
lioninvestor says:
May 26, 2009 at 9:04 pm (UTC 8)
Hi AAW,
It is better to do everything in one application. Keppel Land will have the right to decide what to do if they receive multiple applications. So I don’t know how it will turn out.
WCH says:
May 26, 2009 at 3:40 pm (UTC 8)
Hi
I have been given 900 right issues out of 1000 shares I am holding currently.
If I take up the 900 rights at the price of $1.09/rights (Total of $981), do I have to pay for converting rights into shares at the same pricing of $981? Or the converting is only applicable for excess rights?
lioninvestor says:
May 26, 2009 at 9:06 pm (UTC 8)
Hi WCH,
You pay a total of $981 to convert your rights into shares. Taking up your rights and converting means the same thing in this context.
Jason Yip says:
May 26, 2009 at 10:24 pm (UTC 8)
Hi,
My friend bought 5 lots of KepLand shares today, 26Jun09 but he is going oversea tomorrow.
Q1) Is he entitles to apply for the excess rights?
Q2) If yes,
As he is unable to travel back to Singapore by 2Jun09, can I apply and pay for the excess rights on his behalf using my ATM card and key-in his CDP account?
Thanks and Regards,
JY
lioninvestor says:
May 27, 2009 at 1:05 am (UTC 8)
Hi Jason,
1) No.
2) No.
WSA says:
May 26, 2009 at 11:01 pm (UTC 8)
Hi Sir,
I entitled 900 shares and yesterday I sold all the shares and this morning i bought 3 lots of rights and 2 lots of excess rights via atm..
Am I do it correctly? meaning, I already sold the 900 shares and now still purchase 3 lots…
is it, irregardless I sold or not, I still can purchase the rights or excess via atm?
Pls advise.. thanks in advance
lioninvestor says:
May 27, 2009 at 1:08 am (UTC 8)
Hi WSA,
If you have 1000 Keppel Land shares, you will be given 900 rights.
Did you sell the rights (Keppel Land R or Keppel Land R 900) away?
If so, then there is nothing to apply for. They will refund all your money.
If you sold the mother share (1000 Keppel Land shares), you can still proceed to take up your entitlement of 900 rights and whetever excess rights you want to apply.
WSA says:
May 27, 2009 at 10:48 am (UTC 8)
Yes I sell off the Keppel Land R 900. So, I accidentally “apply” another 3 lots. they will refund to me and do you know when? how abot the excess rights that i apply?
lioninvestor says:
May 27, 2009 at 12:06 pm (UTC 8)
They will refund you the money within 14 days after the rights offer close.
Not too sure how the excess rights will be treated in this case.
WSA says:
May 27, 2009 at 1:02 pm (UTC 8)
ok then.. it seems have to wait till June 15.. thanks anyway for your info.
dave says:
May 28, 2009 at 12:30 am (UTC 8)
Hi Lion,
1) Looking at the prices for the rights over the period of nil rights trading (highest is $0.995 which is less than $1.06) (theoretical price of the rights = $2.15-1.09), would it make more sense to buy the rights from the market rather than balloting it from excess (and may not get it also)?
2) what is the advantage of balloting for excess?
3) can one ballot for excess rights without first owning any rights in the first place? or is balloting only reserved for those with rights already (either from market or from owning mother shares)
Please correct my misconceptions.
THANKS! I have learnt alot from your site. keep it up.
Dave
lioninvestor says:
May 28, 2009 at 3:00 am (UTC 8)
Hi Dave,
1) You have to look at the actual price of Keppel Land (not $2.15).
It’s 2.13 vs rights which is 0.985. Buying the rights and converting it (0.985+1.09) would be slightly cheaper than buying the mother share (2.13).
2) When you apply for excess rights, you are actually applying to buy Keppel Land shares at only $1.09/share.
3) Applying for excess rights is for those who owned Keppel Land shares when it went ex-rights.
SC says:
May 28, 2009 at 1:13 pm (UTC 8)
I am a new investor who bought Kepland recently. Not entitled to the rights issue but would like to know if where can i read up on those technical terms everyone has been typing here. Eg. Nil rights trading, ex-*** etc etc.
Also, if a friend of mine who bought 1 lot b4 12 may which he may be eligible for 900 shares, then can he buy and transfer 450 to me since i have an account as well. please advise. i am a newbie. thank you.
lioninvestor says:
May 28, 2009 at 2:04 pm (UTC 8)
Hi SC,
nil rights trading refers to the period where the rights can be traded.
Ex-rights is something like ex-d (for dividends). It is used to determine the cut-off date of investors who will be entitled to the rights.
What is the purpose of transferring 450 shares to you?
zeejay says:
May 29, 2009 at 11:33 pm (UTC 8)
Hi Martin,
Recently, I reinvested the dividend from Keppeland which was $80 and entitled to 59 shares. However, I’ve just checked my CDP account online and it was not reflected in my statement.
I was planning on applying 41 shares of ex-rights to make the no. of shares even i.e 900+41+59= 1000 shares.
My question is; how come the 59 shares is not reflected in my CDP statement?
And is my planning to make the shares into a 1000 is correct? I hope you can help me on this. I strongly believe you can help.
Thanks in advance.
lioninvestor says:
May 29, 2009 at 11:41 pm (UTC 8)
Hi Zeejay,
the crediting of the dividend scrip is not immediate. The acceptance deadline isn’t even over yet.
Why stop at 41 when you can go for 1041, 2041, 5041, 10041 or even more?
Remember that for excess rights, you are essentially applying to buy Keppel Land shares at $1.09/share.
If I can get even 1 lot of excess rights (means about 1k profit), the odd lot wouldn’t bother me too much.
zeejay says:
May 30, 2009 at 7:46 am (UTC 8)
Hi Martin,
Got it.
Thanks.
lioninvestor says:
June 6, 2009 at 2:48 am (UTC 8)
Results are out:
http://www.martinlee.sg/keppel-land-rights-results/
Yukitai says:
June 6, 2009 at 8:39 pm (UTC 8)
Hi Lion,
I was confusing the pricing ! I have 2000 mother share at $2.78 and 2.85 and I have 1800 Rights at $ 1.09, After the conversion on 12 Jun, Total I got Kepland is 3800 share, Then what is the pricing after 12 Jun ? Can You shown me how to calculate it ?
Can I trade all share( 3800) under kepland counter?
Thanks \ ‘ _ ‘ /
lioninvestor says:
June 7, 2009 at 12:30 am (UTC 8)
Hi Yukita,
Your average price overall (excluding commissions) is (2780+2850+1.09×1800)/3800
No one can predict the price on 12th June but the last traded price was $2.54.
Yukitai says:
June 8, 2009 at 2:09 pm (UTC 8)
Hi lion,
I appreciate your prompt response. Thank You very much.
Best Regards,
Yukitai