KUALA LUMPUR: TIME ENGINEERING BHD [] (TEB) has proposed to undertake a renounceable offer for sale its 626.18 million shares in TIME DOTCOM BHD [] (TdC) to TEB shareholders.
TEB said on Friday, Jan 21 the offer would be on the basis of eight offer shares for every 10 shares held in TEB. It said for illustrative purposes, based on its paid-up as at Jan 15, it would offer for sale 620.19 million shares, representing 24.51% equity interest in TdC.
TEB added the offer price would be not'' less than 20% to the five-day volume weighted average market price up to the day prior to the price-fixing date. However, it shall not be less than 48 sen per offer share.
To recap, TEB's investment in TdC was on Dec 26, 2000 where the TEB and its subsidiaries and TdC and its subsidiaries were restructured.'' The debt owed by the TdC droup to TEB was settled via the issuance of TdC shares by TdC to TEB on the basis of one new TdC share issued for every RM3 debt owing by TdC to TEB.
With the adoption of FRS139 Financial Instruments: Recognition and Measurement with effective from Jan 1, 2010, the carrying amount of TEB's stake in TdC was marked to its market value. The current written down cost of investment of the remaining TdC shares was 38 sen per share.
On July 30, 2009, TEB shareholders had an EGM given a mandate to TEB to dispose of its shares held in TdC at a price not lower than 48 sen per TdC share.
TEB said the proposed offer for sale would enable TEB to divest its stake in TdC and enable entitled shareholders to have a direct participation in the prospects and future performance of TdC at a discount to the market price.
"Further, the divestment will allow TEB to fully or substantially early redeem its outstanding redeemable secured loan stock (RSLS) issued to Bank Pembangunan Malaysia Bhd," it said.
TEB added the exercise would enable it to raise funds for working capital purposes, expansion of existing businesses and for investments.
TEB would realise a gain before tax of about RM36.43 million from the offer for sale after accounting for the current written-down cost of investment of 38 sen per TdC share;'' the accelerated RSLS interest costs of approximately RM26.19 million (unaudited as at Sept 30, 2010); and assuming full take-up of the offer shares at an illustrative offer price of 48 sen per offer Share.
"These gains, which exclude the estimated expenses for the proposed offer for sale, will increase the consolidated earnings per share of TEB by approximately 4.7 sen based on the issued and paid-up share capital of TEB of 775,244,683 TEB Shares.
"Further, TEB will be able to realise a minimum interest cost savings of approximately RM6.84 million per annum upon early redemption of the RSLS, in full," it said.
TEB said on Friday, Jan 21 the offer would be on the basis of eight offer shares for every 10 shares held in TEB. It said for illustrative purposes, based on its paid-up as at Jan 15, it would offer for sale 620.19 million shares, representing 24.51% equity interest in TdC.
TEB added the offer price would be not'' less than 20% to the five-day volume weighted average market price up to the day prior to the price-fixing date. However, it shall not be less than 48 sen per offer share.
To recap, TEB's investment in TdC was on Dec 26, 2000 where the TEB and its subsidiaries and TdC and its subsidiaries were restructured.'' The debt owed by the TdC droup to TEB was settled via the issuance of TdC shares by TdC to TEB on the basis of one new TdC share issued for every RM3 debt owing by TdC to TEB.
With the adoption of FRS139 Financial Instruments: Recognition and Measurement with effective from Jan 1, 2010, the carrying amount of TEB's stake in TdC was marked to its market value. The current written down cost of investment of the remaining TdC shares was 38 sen per share.
On July 30, 2009, TEB shareholders had an EGM given a mandate to TEB to dispose of its shares held in TdC at a price not lower than 48 sen per TdC share.
TEB said the proposed offer for sale would enable TEB to divest its stake in TdC and enable entitled shareholders to have a direct participation in the prospects and future performance of TdC at a discount to the market price.
"Further, the divestment will allow TEB to fully or substantially early redeem its outstanding redeemable secured loan stock (RSLS) issued to Bank Pembangunan Malaysia Bhd," it said.
TEB added the exercise would enable it to raise funds for working capital purposes, expansion of existing businesses and for investments.
TEB would realise a gain before tax of about RM36.43 million from the offer for sale after accounting for the current written-down cost of investment of 38 sen per TdC share;'' the accelerated RSLS interest costs of approximately RM26.19 million (unaudited as at Sept 30, 2010); and assuming full take-up of the offer shares at an illustrative offer price of 48 sen per offer Share.
"These gains, which exclude the estimated expenses for the proposed offer for sale, will increase the consolidated earnings per share of TEB by approximately 4.7 sen based on the issued and paid-up share capital of TEB of 775,244,683 TEB Shares.
"Further, TEB will be able to realise a minimum interest cost savings of approximately RM6.84 million per annum upon early redemption of the RSLS, in full," it said.
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