MTRONIC 0043 METRONIC GLOBAL BERHAD rights shares offer 111pct potential profit?
Hong Kong International Trading Center Sdn Bhd chief executive officer Kelly Wong Pei Fun said subscribers of Mtronic-OR would be able to reap profit from both the discounted offer price of Mtronic ordinary shares at six sen and the free warrant.
KUALA LUMPUR: Metronic Global Bhd's trading rights (Mtronic-OR) will be transacted on Bursa Malaysia until June 20 pursuant to its latest renounceable rights of up to 1.5 billion renounceable Mtronic-OR at an issue price of RM0.06 with free warrants (Mtronic-WB).
This was on the basis of six rights shares together with two Mtronic-WB for every one existing Mtronic share held by shareholders on June 10, the company said in a statement.
Hong Kong International Trading Center Sdn Bhd chief executive officer Kelly Wong Pei Fun said subscribers of Mtronic-OR would be able to reap profit from both the discounted offer price of Mtronic ordinary shares at six sen and the free warrant.
The issue price of six sen per rights share represented a discount of five sen from Mtronic's last traded price of 11 sen on Tuesday.
Thus, for every subscription of six rights share, subscribers would receive six times the discount of five sen, which was equivalent to 30 sen, Wong said.
For every subscription of six rights shares, subscriber will also get two free warrants, which can be traded at its intrinsic value of five sen, being the difference between the share price of 11 sen and its exercise price of six sen.
The total value of the two warrants is 10 sen, ie. two warrants times five sen.
Exercise price of warrant is the amount warrant holders need to pay the company in order to convert the warrant into ordinary share.
"For every subscription of six rights shares at six sen each, the total potential profit is the sum of the total five sen discount of the six new ordinary shares and five sen intrinsic value of the two free warrants. This brings the total to 40 sen or 111 per cent of profit on a 36 sen investment for the six rights shares," Wong said.
Referring to Mtronic's prospectus dated June 10 this year, in order to subscribe to the rights issue, investors must either own Mtronic shares on the ex-date of June 9 or buy the traded rights before June 20.
The deadline for subscribers to pay for the trading rights is June 28.
The new shares and free Mtronic-WB are expected to be listed on July 13.
A total of 13.08 million Mtronic-OR changed hands throughout the first day of trading on June 13 and it closed at RM0.005 on Tuesday.
The parent stock fell RM0.005 or 4.35 per cent to RM0.110 on Tuesday with 8.08 million shares changing hands throughout the day.
https://www.nst.com.my/business/2022/06/805106/mtronic-rights-shares-offer-111pct-potential-profit
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