LISTING'S CIRCULAR NO. L/Q : 54088 OF 2009
RENOUNCEABLE RIGHTS ISSUE OF UP TO 260,412,729 NEW ORDINARY SHARES OF RM0.50
EACH IN BOUSTEAD HOLDINGS BERHAD ("BHB") (BHB SHARES) (RIGHTS SHARES) AT AN
ISSUE PRICE OF RM2.80 PER RIGHTS SHARE PAYABLE IN FULL UPON ACCEPTANCE ON THE
BASIS OF TWO (2) RIGHTS SHARES FOR EVERY FIVE (5) EXISTING BHB SHARES HELD AT
5.00 P.M. ON 17 AUGUST 2009 ("RIGHTS ISSUE").
Kindly be advised of the following :
1) The Rights commence of trading : [ 18 August 2009 ]
2) The Rights cease quotation : [ 2 September 2009 ]

bstead-or trading at 0.685
bstead trading at 3.560

So every every 1k of bstead, meaning shareholder will get given 200 of bstead-or that he can sell at 0.685 .

Say i buy 1k of the bstead-or at 0.685 [0.685 * 1000 = rm685]

Then I wait and convert it to the bstead [685 + (2.80 * 1000) = rm 3485

Is my calculation correct? Is it really cheaper to buy the or and then convert rather to buy the mother share directly now?

--> Assuming, transaction charges and the setem hasil excluded ...

This post has been edited by GregPG01: Aug 21 2009, 04:10 PM

calculation is correct.

for OR subscription, one would have to wait for the conversion to be done, which may take around 2-weeks or so.

therefore the OR is relatively discounted from current mothershare price.

Thanks for the confirmation.

Also noticed that the OR will also miss the 5% dividend (minus income tax). Ex-date is just round the corner at 03/09/2009 .

I bought the mothershare directly.

Seriously guys,

I am a long term investor, and i dont think that BSTEAD is a good stock to hold for long term, the management team i would rate an ok only due to the average 5 Year ROE of about 12%. The one major thing i dont like about this company is its leverage. Its debts are too high relative to its Equity and assets.

I think this stock is only good for trading purposes (the volatility is not that high too) but i would strongly advise not to buy this stock if you are a long term investor. Hope this is helpful to some of you guys out there.

Mind to elaborate more why isit not a good buy?
I have been eyeing Bstead for quite some time now. planning to enter once RM3.5 support level is break
For me it has a PE of less than 8 after the quarterly result.
Its NTA is approx 4.50 which is 30% more than its current share price.
Plus it has a dividend yiled of 5-6% if dividend level remain as per last year.
Additional, they are now undertaking right issue to redeem its debt which indicate much lower gearing level.

my 0.0000005 cents

I would like to take backwhat i have said earlier....its actually quite an ok stock....dividend ok, ROE ok, price trading below NTA (also ok), the only thing i dont like about this stock is its leverage. Even with the rights issue, its leveraged is too high for my liking. if i remember correctly, their current ratio is about 0.5 or lower (might be wrong, have to double check) which means that they only have about 50cents to service every dollar of their short term debts.

Companies with lots of loans doesnt really mean that its a bad company, and companies with no loans doesnt mean that its a good company either. Its preferance of individual investors. As for me, i like companies with little debts, possibility of bankruptcy is much lesser than those with lots of debts.

Overall, i would rate bstead as a moderate stock...solely due to the fact of its leverage. The rest of the ratios are fine....

P.S. it might turn out to be a good investment...(just like BJTOTO, i dont like the stock because there is no net assets inside the company at all, but its doing well)

Reasons why i dont like companies with lots of debts because once they are in need of cash urgently, they need to borrow from banks, and banks nowadays (due to the credit crunch) insist alot from companies, e.g. Titan took loan from a bank (i forgot which bank already) and the banks didnt allow Titan to pay dividend for 2 years (again, if i remember correctly) orsomething like that.