YTL-Power Warrants Finally Comes on Stream

Power Builder

It has been a long wait. Really long one.

I thought we were waiting for Godot, Francis?

So, let us recap.

The Station at Paka

For every 15 shares you have in YTL Corp on 18 June 2012, you will be entitled to get one free warrant at 20 sen.

So, a shareholder having 1000 shares will be allotted 66 warrants.

A friend of mine was allotted 811 warrants.

As per warrant is offered at 20 sen instead of the current 51 sen, he has to cough out RM162.20 and he will have to add the bank draft charges of RM5 plus pay RM10 stamp duty. All in all, he will have to set aside RM177.20.

However, he has a choice of rounding it to 1000 units in which the company may just give him the remaining excess of 189 units at RM37.80. In this scenario, he will pay out RM215.00

As the current price of YTL-Power Warrant is trading at 51.5 sen per unit, it pays for a shareholder to go for excess shares.(Rounded down to 51 sen)

For instance, a person can buy excess units worth 20,000. All he needs to pay is 20,000 x 0.20 = RM4,000

Assuming he gets what he subscribed, he will stand to gain 51-20=31 sen x 20,000= RM6,200. After deducting RM60.00 for overheads; he will have a net gain of RM6,140.

Strangely, you will also have those people with odd lots.

Some even have two units offered to them.

Let us assume, they buy to top up to 100 units, 1000 units and 10,000 units

Pasir Gudang

If they only buy up to 100 units, they will have to pay RM20. Overhead charges will come to RM20, making a total commitment of RM40. This will not be a good proposition as in the situation where he has to sell, he will again have to foot RM30 overhead. Losses will be 51-70 = RM19.00. In all silliness,no one then will go for 100 units.

Going forward, let us say, he buys into 1000 units. His cost will then be RM200+20=220. In this situation, he will make some gains. Assuming he has to sell, it will work out this way. RM510-220= RM290.00 gross. After deducting for overheads of RM30.00, he will take home RM260.00.

Power Seraya Singapore

Now, let us scale up. He buys excess to 10,000 units. So his outlay now will be RM2,000+20 =RM2,020. If he sells, he will make 5,100-2020=RM3,080. Deducting brokerage of RM30.00, he will take home RM3,050.

To make it his while, his best bet will be to go for 10,000 units. His return will be 152%; while for the 1000 units bid, his returns will be 118%.

Let us look at the important dates for subscription.

Title / Description	Renounceable offer for sale of up to 733,079,172 existing warrants 2008/2018 in YTL Power International Berhad (“Offer Warrants”) by YTL Corporation Berhad (“YTL Corp”) to the entitled shareholders of YTL Corp at an offer price of RM0.20 for each Offer Warrant, payable in full upon acceptance, on the basis of 1 Offer Warrant for every 15 existing ordinary shares of RM0.10 each held in YTL Corp at 5.00 p.m. on 2 October 2012 ( There is an error here)
Despatch Date	04/10/2012
Date for commencement of trading of the rights	03/10/2012
Date for despatch of abridged prospectus and subscription forms	04/10/2012
Date for cessation of trading of the rights	10/10/2012
Date for announcement of final subscription result and basis of allotment of excess Rights Securities	24/10/2012
Listing date of the Rights Securities	31/10/2012

Last date and time for	Date	Time
Sale of provisional allotment of rights	09/10/2012	at	05:00:00 PM
Transfer of provisional allotment of rights	12/10/2012	at	04:00:00 PM
Acceptance and payment	17/10/2012	at	05:00:00 PM
Excess share application and payment	17/10/2012	at	05:00:00 PM