Truncating TIME dotCom

Amidst the fall-out at Wall Street due to poor employment numbers, Time Dot.com will undergo truncating in a very convulated manner that will see its share price re-adjusted on 16 May 2012.

What will take place?

The following will be implemented.

First step: A Capital Repayment 2 sen for every TdC Share. The amount will come up to RM50.615 million (RM0.69)

Second Step: Paid up of TdC share will be reduced by the cancellation of 90 sen of the par value from every RM1 share.

Third Step: Share consolidation of 2,530,775,000 TdC Shares with a par value of RM0.10 each post-reduction into 506,155,000 TdC Shares with a par value of RM0.50 each in TdC, on the basis of five (5) TdC Shares of par value of RM0.10 each into one (1) TdC Share of RM0.50 each

From 11 May 2012, TdC will trade ex-offer. Take note that there will be no suspension in view of the implementation of both capital repayment and capital restructuring.

Let us review the share from the quantum perspective.

1) Current: Existing issued and paid-up share capital of TdC is RM2,530,775,000 comprising 2,530,775,000 ordinary shares of RM1.00 each.

2) Post Restructuring: the issued and paid-up share capital of TdC shall be RM253,077,500 comprising 506,155,000 ordinary shares of RM0.50 each.

The shares in relation to the Share Consolidation will be listed and quoted on the Main Market of Bursa Securities on 16 May 2012, being the next market day following the entitlement date of 15 May 2012.

Let us work a theoretical framework for the layman.

Assume: He has 1000 TdC shares of RM1 par prior to restructuring. (RM0.71)

Capital return of 2 sen: (RM0.69)

Truncation: The value of RM0.90 sen is taken off each share and the remaining share will by 1000 Tdc share with RM0.10 par value.(RM0.69)

Consolidation: 5 shares each of the 1000 shares will be consolidated into one share of RM0.50 sen par value. (RM3.45)

Aftermath: He now has 200 shares of TdC of RM0.50 sen value. (RM3.45)

As such the share value of his 200 shares would add up to (RM3.45 x 200)= RM690.

Working up to per lot of 1000 shares, the new price of the TdC share will be about RM3.45

Let us see whether there will be a surge in demand post restructuring of TdC.

PS: TdC adjusted to RM3.17 on 11 May for an initial 3 sen gain.