Saturday, May 23, 2009

Disgusting Pac Andes

Pac andes just threw a grenade towards my direction. Make it 2 grenades. It got me hot and bothered!

1. First grenade - they are issuing rights on a basis of 1 rights share @ $0.15 for every existing share held. The rights come with detachable warrants, with an exercise price of $0.23 each to convert to 1 ordinary share.

Hey, didn't pac andes do a rights issue in 2007 before? And they are doing it again? C'mon...are you so pressed for money to keep asking shareholders to part with their cash?? It's not enough to dump shareholders with rights issue, and you still want to get more money out of shareholders when they convert their warrants??

2. Second grenade - they are going to restructure their share capital. Initially, their share capital of $400 mil is divided into 2000 mil shares, with par value of $0.20 each. Now, they are going to divide their share capital into 8000 mil shares instead, giving a par value of $0.05 each.

This takes some fees and do you know what's the rationale for this exercise?

It's stated that the main purpose for this reorg of share capital is to enable the company to undertake the proposed rights issue because the average closing price of pac andes is at $0.186 (for the 7 month prior to the date of the announcement today). This happens to be below the par value of $0.20 per share in the current system.

Since the Bermuda Companies Act prevents a company from issuing shares at a price below the par value of the share, they are going to go through a reorg of the share capital just so as to allow the proposed rights issue to go on! They stated that this will allow them greater flexibility in issuing new shares in the future when the opportunities arise.

HELLO! There's a lot of nasty things I wouldn't want to blog in public. What is the management thinking about?!


Anonymous said...

what's so disgusting? share price went up so much after the news. u can sell them away now if u don't like it. =)

la papillion said...

Hi anon,

It's disgusting because of the frivolous way that management treat its shareholders, never mind the price increase or not.

I've already disposed of my holdings.

Financial Freedom said...

Agree with you LP. It is a bit disgusting. I hold shares in Pac Andes too. Once the shares cross a certain price, I think I will just sell them all off.

la papillion said...

Hi FF,

Haha, best of luck then :) For me, I've reinvested all the proceeds from the sale of shares to another counter.

No point waiting, in my opinion :)

我是某某人 said...

how about Swiber recent placement?

la papillion said...


Swiber disgusts me too. 20% dilution, with placement shares @ 0.88 is too much for me to take it.

I'll see what I can do with it.

Createwealth8888 said...


Are you going to sell Swiber too?

QUESTRADE COUPONS - All Coupons, discounts, promo codes, offers, and reviews said...

I am outta here...I sold mine entirely and glad i did