Martin Lee @ Sg
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Keppel Land Rights Issue Proposal

Keppel Land this morning announced a proposal for a renounceable rights issue to raise approximately $712.3 million. The offer entitlement will be nine Rights Shares for every ten existing ordinary shares held. Up to 653,462,397 new shares will be issued at a price of S$1.09. 

Based on the closing price of S$1.88 on 23th April 2009, the theoretical ex-rights price will be S$1.50 per share while the NTA will be S$2.35 per share. Keppel Corporation has agreed to take up its full entitlement of Rights Shares based on its interest in 52.64% in Keppel Land.

The key dates of the Rights Issue are not available yet as the implementation of this Rights Shares Issue is subject to the approval of SGX, shareholders and lodgement of the offer information statement (OIS) with MAS.

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31 comments
Yukitai says 10 years ago

Hi Lion,

I was confusing the pricing ! I have 2000 mother share at $2.40 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 \ ‘ _ ‘ /

Reply
    lioninvestor says 10 years ago

    Hi Yukitai,

    Yes, all will become Keppel Land shares. The only issue is your 800 shares which can’t be directly traded as it is an odd lot.

    You will either have to trade on the unit market of Keppel Land, or use Keppel Land 100 (which trades in size of 100 shares).

    Reply
      Yukitai says 10 years ago

      Thanks Lion, What is my share price over all ? Pls help, because I’m new investor , Thanks a lot.

      Reply
Tan says 10 years ago

Hi lioninvestor,

Let’s say if i purchased only the Rights (10 lots), does that mean that I will only need to pay SGD 10900 (10x1000x1.09) to convert it to ordinary share?

Or I have to purchased the mother share as well? (i.e. 10x1000x1.09 + 10x1000x2 [assume the current market price is 2.00])?

Reply
    lioninvestor says 10 years ago

    Hi Tan,

    If you had purchase the rights, you will need to pay $1.09/right to convert them to shares.

    The cost of doing that (buying rights and converting) should be close to the cost of buying the mother shares directly.

    Note that the rights have already stopped trading, so if you are holding on to them, you will need to apply for the conversion before 2 June. Otherwise, they will become worthless.

    Reply
      Tan says 10 years ago

      Hi, That means the trading price of Rights is fluctuating as well with the mother shares during the Rights trading period?

      Reply
        lioninvestor says 10 years ago

        Yes. The rights is just like a very short term warrant or call option. $1.09 is the conversion (or strike) price.

        But like I mentioned, the trading period of Keppel Land Rights is already over.

        Reply
sureesh says 10 years ago

Based on yesterday’s closing price what is the price of the nil paid rights now. Is this price confirmed yet. So if we buy nil paid rights share we have to top up by another $1.09 to convert to ordinary shares. Am i right

Reply
    lioninvestor says 10 years ago

    Hi Sureesh,

    The nil paid rights start trading from 19th May. You will only know the price on that day and of course, it will move throughout the day.

    Based on a price of $2.16 for Keppel Land, the rights should trade around $1.07.

    Yes, if you buy the rights, you will need to top up $1.09/right to convert them to shares.

    Reply
shirley says 10 years ago

Dear Lioninvestor,
How can we buy the right from open market from those shareholder who not interested to convert the right to ordinary share ? When shall we start ?

Thank you.

Reply
    lioninvestor says 10 years ago

    Hi Shirley,

    The rights will be tradable from 19 – 27 May. Look out for the counter Keppel Land R.

    Reply
      alice says 10 years ago

      Hi lioninvestor,

      I saw there are two counter – Keppel Land R and Keppel Land R900. What is the difference between these two?

      if we buy the rights from the market, by when and how to convert these shares?

      Many thanks for your sharing.

      Reply
        lioninvestor says 10 years ago

        Hi Alice,

        Keppel Land R 900 allows you to trade the rights in odd lots of 900 shares.

        Last day of acceptance is 2nd June.

        You can download the offer document here:

        http://www.martinlee.sg/uploads/keppel-land-rights-ois.pdf

        Reply
          alice says 10 years ago

          thank you!

          Reply
Keppel Land Rights Issue says 10 years ago

[…] 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 […]

Reply
sureesh says 10 years ago

Win

if you have only 1 lot, your rights entitlement is only 900 shares less than 1 lot because the ratio is 9 rights share for every 10 mother shares held.

Reply
    Win says 10 years ago

    Hi lioninvester,
    Thks for your reply. what i mean is, as i have 1 lot of mother of KP, so i am entitle to apply for excess rights, right ?
    Do u think i should buy another 9 lots to make-up to 10 lots of mother & entile for 9 lots of rights, or to use the funds to apply for excess of rights ?
    best regards

    Reply
      lioninvestor says 10 years ago

      Hi Win,

      Just to clarify, the previous reply wasn’t by me.

      Of course, getting as many excess rights as possible is the ideal case but we wouldn’t know how much we would end up being allocated. Before you can apply for excess rights, you need to take up your full allocation first.

      If you buy 9 additional lots, don’t forget you have to set aside the sufficient money ($1.09 per right) to convert all those rights to shares.

      Applying for excess rights is like trying for 4D. Each one you get is a bonus and should be profitable.

      Buying more shares to get the entitled rights means you take an additional position and subject yourself to the market risk. Whether it is profitable or not will depend on the price movement – something which no one can predict.

      Reply
        lioninvestor says 10 years ago

        Just to add on, if past results are anything to go by, you might get 100-2100 excess rights if you apply for them. Together with your entitlement of 900 shares, you will end up with 1000-3000 shares.

        Reply
          Win says 10 years ago

          Hi Lioninvestor,
          Regrading the excess rights for KL, do u know how they allocate ? What is the ratio or changes of getting the excess rights ? Thks + best regards, Win

          Reply
            lioninvestor says 10 years ago

            Hi Win,

            It depends on how many people take up their rights entitlement.

            You can refer to Capitaland as an example.

            http://www.martinlee.sg/capitaland-rights-issue-results/

            The chances might be around 10 is to 1 or less but odd lot holders will be given priority.

            Reply
Win says 10 years ago

Hi Lioninvestor,

Currently i am holding 1 lot of KeppelLand @1.71. Kindly advise, should i buy another 9 lots to get 9 lots of rights (@$1.72 x 9 = $15,480) or should i use $16,350 to apply for the (15 lots) excess right ? If you were me, what is your decision at present mkt ?

Reply
Ogy1972 says 10 years ago

Hi Lioninvestor,

Currently I’m holding 2 lots of [email protected] 1.82 using CPF and lost amounting to $300. If I were to exercise the rights by selling it at nil-right price, will I be able to encash the proceeds. As the shares are heading south towards dilution, is it wise if I just sell-off the 2 lots after exercising my rights and cut my losses.

Thanks

Reply
    lioninvestor says 10 years ago

    Hi Ogy1972,

    You can refer to my earlier article on Capitaland Rights issue to see what are the options open to you.

    http://www.martinlee.sg/capitaland-rights-issue/

    You will need to rework the maths again using your current situation.

    One point to take note is that as your purchase is made using CPF, you will need to make sure your stock limit is not exceeded if you want to subscribe for the rights. Otherwise, you will need to transfer cash into CPF in order to do so.

    Reply
      Ogy1972 says 10 years ago

      Hi Martin,

      Thanx for the reply and have read thru’ the article you suggested. I guess we can never liquify the rights issue for shares bought using CPF. And I’m never gonna ever..ever top-up cash for my shares bought using CPF coz it’ll be stuck there till u’re 55,right.(my CPF fund have enough for ‘share shopping spree’ after putting aside my housing loan and the $20k demon,- but hands are tied by the limits set by brokerage firm). Hope to get an update from you on the Kepland rights issue coz U seems to be ahead of most analyst. BTW, with the STI improving more than 200pts for the past 3 days, do you think we have past the rock bottom and whether the ‘correction’ of the market will occur anytime soon. PM & MM not too optimistic about the green shoots either. Maybe March 2009 will re-appear again.

      Reply
        lioninvestor says 10 years ago

        Hi Ogy1972,

        Looks like your little loss has turned into a handsome profit. 🙂

        The stock limits are actually set by the CPF board, not the brokerage firms.

        You can refer to my follow up post on the key dates and options available to you:

        http://www.martinlee.sg/keppel-land-rights-issue/

        Reply
sureesh says 10 years ago

Hi

I am a keppel land share holder . Should i subscribe to the rights. What is the chance that the share price will fall below the rights price of 1.09

Reply
    lioninvestor says 10 years ago

    Hi Sureesh,

    It is still too early to predict whether the share price will fall under $1.09.

    In the event you do not take up the rights, do remember to sell it off to take back some capital.

    Reply
lioninvestor says 10 years ago

Hi Jack,

For now, the subject line will have to be added manually. I will try to see whether I can do it.

You can also consider using a RSS reader. It will allow you to keep track of all your favorite site in one place.

http://www.google.com.sg/reader
http://feeds2.feedburner.com/LionInvestor

For the comments, you have to leave a comment. Otherwise, there is no way for the system to know your email address and your intention to keep track.

Having said that, I just added a feed for comments.

http://feeds2.feedburner.com/LionInvestor

So, you can subscribe to it using RSS reader or normal email.

Reply
    Jack says 10 years ago

    Thanks Lion Investor.
    Rgds,

    Reply
Jack says 10 years ago

Hi Lion Investor,
I noted when we receive a new subject or topic notification, there is no subject description. Is it possible to include a subject description?. Also, how do we track a topic to follow up comments without actually having to submit a comment?.
Thanks.

Reply
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