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.