Martin Lee @ Sg
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Keppel Land Rights Issue

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.

The Keppel Land Rights OIS can be downloaded here.

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67 comments
Yukitai says 10 years ago

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 \ ‘ _ ‘ /

Reply
    lioninvestor says 10 years ago

    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.

    Reply
      Yukitai says 10 years ago

      Hi lion,

      I appreciate your prompt response. Thank You very much.

      Best Regards,

      Yukitai

      Reply
zeejay says 10 years ago

Hi Martin,

Got it.
Thanks.

Reply
zeejay says 10 years ago

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.

Reply
    lioninvestor says 10 years ago

    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.

    Reply
SC says 10 years ago

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.

Reply
    lioninvestor says 10 years ago

    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?

    Reply
dave says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    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.

    Reply
WSA says 10 years ago

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 🙂

Reply
    lioninvestor says 10 years ago

    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.

    Reply
      WSA says 10 years ago

      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?

      Reply
        lioninvestor says 10 years ago

        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.

        Reply
          WSA says 10 years ago

          ok then.. it seems have to wait till June 15.. thanks anyway for your info.

          Reply
Jason Yip says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    Hi Jason,

    1) No.

    2) No.

    Reply
WCH says 10 years ago

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?

Reply
    lioninvestor says 10 years ago

    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.

    Reply
AAW says 10 years ago

Hi Lioninvestor

Can I buy the excess rights for more than one time through ATM application before the closing date?

Reply
    lioninvestor says 10 years ago

    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.

    Reply
Angeline Ng says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    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

    Reply
Alice hew says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    Hi Alice,

    According to page 31 of the offer document, foreign shareholders are not entitled to the rights issue.

    http://www.martinlee.sg/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

    Reply
Tym says 10 years ago

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.

Reply
    lioninvestor says 10 years ago

    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.

    Reply
Tym says 10 years ago

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?

Reply
    lioninvestor says 10 years ago

    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.

    Reply
      Tym says 10 years ago

      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

      Reply
        lioninvestor says 10 years ago

        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/

        Reply
Ryan says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    Hi Ryan,

    Unless you are dealing in odd lots, selling your mothershare now shouldn’t have much impact on your rights application.

    Reply
gisl says 10 years ago

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.

Reply
    lioninvestor says 10 years ago

    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).

    Reply
    JT says 10 years ago

    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.

    Reply
      gisl says 10 years ago

      lioninvestor and JT, thanks for your help.

      Reply
zeejay says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    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.

    Reply
      zeejay says 10 years ago

      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

      Reply
        lioninvestor says 10 years ago

        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.

        Reply
          zeejay says 10 years ago

          Hi lion,

          Very detailed, I like.
          Thanks.

          Regards
          ZJ

          Reply
Win says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    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?

    Reply
askxyz says 10 years ago

Is it more worth buying from the main shares than to buy from rights? Would you be able to show us the difference?

Reply
askxyz says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    Hi Jeremy,

    After you have bought the rights, you will still need to pay $1.09/right to convert them to normal shares.

    Reply
Lawrence says 10 years ago

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

Reply
    lioninvestor says 10 years ago

    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.

    Reply
      Lwarence says 10 years ago

      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

      Reply
        lioninvestor says 10 years ago

        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.

        Reply
askxyz says 10 years ago

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?

Reply
    lioninvestor says 10 years ago

    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.

    Reply
      alice says 10 years ago

      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

      Reply
        lioninvestor says 10 years ago

        Hi Alice,

        You can certainly do that, but you won’t be given any excess.

        http://www.martinlee.sg/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)

        Reply
          alice says 10 years ago

          Hi lioninvestor,

          I appreciate your prompt response and generous sharing of your knowledge. Thank you!

          Best rgds,
          alice

          Reply
Jimmy Yeo says 10 years ago

Hi Lion Investor,

Do you have KeppelLand Right Offer document ? Would you be able to share with us ?

Reply
Adrian Chua says 10 years ago

When can I apply for the remaining excess rights? I just bought 1 lot.

Reply
    lioninvestor says 10 years ago

    Hi Adrian,

    The last day for acceptance and payment for your Rights Shares is 2nd June 2009.

    Reply
      Adrian Chua says 10 years ago

      Thank U!

      Reply
askxyz says 10 years ago

Hi lionvestor,

Thanks for your reply.

What is odd lot? 1,3,5 lots? Why prioroty to odd lot holders?

Reply
    lioninvestor says 10 years ago

    Odd lots means not in denominations of 1000 shares.

    Priority given to odd lot holders and directors, substantial shareholders will rank last…

    Reply
askxyz says 10 years ago

Hi,

Ho do I apply for excess rights? If I only buy 1 lot, how many excess rights can I apply for?

Thanks

Reply
    lioninvestor says 10 years ago

    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.

    Reply
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