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20-03-2014, 11:56 AM
I have a concern with investing in OldTown.
The company has a short listing history, having listed on the Bursa in Jul'11, raising RM79.2m as a result.
Fast forward 1.5 years later, the company underwent a private placement, issuing 33m new shares(10% of outstanding shares) raising RM64m as a result with the main purpose for capex to expand their business.
However, Oldtown's balance sheet was strong at the point of placement and debt was minimal(LT debt at RM12m - info from financial times) I do not see why a private placement had to be done to dilute the EPS.
The below post by a Malaysian blogger(I presume) explains my point in further detail.
http://www.intellecpoint.com/2012/09/old...hould.html
Jm2c (not vested)
The company has a short listing history, having listed on the Bursa in Jul'11, raising RM79.2m as a result.
Fast forward 1.5 years later, the company underwent a private placement, issuing 33m new shares(10% of outstanding shares) raising RM64m as a result with the main purpose for capex to expand their business.
However, Oldtown's balance sheet was strong at the point of placement and debt was minimal(LT debt at RM12m - info from financial times) I do not see why a private placement had to be done to dilute the EPS.
The below post by a Malaysian blogger(I presume) explains my point in further detail.
http://www.intellecpoint.com/2012/09/old...hould.html
Jm2c (not vested)