Hello, anyone can explain in details what actually is this? I'm holding airasia share and I receive a message from maybank investment staff regarding this, what happen if I take the rights(and how i do that)? and what happen if I didnt? thanks in advance

The rights will be credited to your account. You then have a short window to sell the Rights, from 3rd Dec to 9th Dec, If you don't sell, then you should subscribe to the RCUIDs by 17 Dec, otherwise you get hit by the dilution. You will then get the RCUIDS and some free warrants. The RCUIDs gives you interest and can be convertible to 1 share

This is from the top of my head..please verify the dates n also read up on the Abriged Prospectus to understand what this RCUIDs give you

i too got the message and i am quite confused with this as well. first timer here by the way. so i just have to call the investment bank and inform them i want to sell the rights?
in the message it did state there will be free warrants upon purchasing additional units

You can sell the rights like any normal share. You should see it in your CDS account by 3rd Dec.

To get the free warrants you need to subscribe (buy) the RCUIDS.

the rights is tradeable... so once it is listed you can either buy or sell those rights (like a normal stock) .... BUT REMEMBER this... it is EXTREMELY IMPORTANT.... these rights are only tradeable within a time period only... once it is past the trading period, these rights will be TOILET PAPER... worthless. So very important to check the trading period for these rights ya...

and ya... the first 2 days... 'usually' these type of rights can be extremely bullish... but once the buying frenzy... better sell ASAP!!

This post has been edited by Boon3: Dec 1 2021, 03:16 PM

If not intend to subscribe, can sell the Right in the market when it is trading at short period of specified listing time.
You will see a new counter or stock ticker specified for the Right trading.

The right is priced at RM0.75.

So the Right is "in money" if the mothershare stay at current level (RM0.85) when trading.

and if one believes so much in AA ( ) ... they can of course subscribe to more shares by buying more rights.

excess application is not guaranteed right? hopefully it's not undersubscribed then.

AA needs a lot of money ah. if i were a shareholder and i believe in them, will subscribe also la.

but if you dun subscribe, you get diluted.

Yup... a bit complex situation....

consider this.....

Now say one 'believes' in AA.... and had already invested a fair bit of money b4 Covid days... probably with cost > 2 (since b4 covid, got the juicy 'special special dividend) ....
but now.... times are susah a bit..... own money not enough to subscribe ....

how?

what would you do?

I am reminded of AAX rights issue a few years back...

i would probably cut loss before covid already, why? you know this pandemic gonna affect the industry as a whole, on a prolonged basis. Also means, i'm not gonna buy-in until i see the light at the end of the tunnel.

but coming back to your question, hypothethically, if you don't buy, you get diluted, you don't get the free candies plus your mother share price would be adjusted. takkan you wanna take double / triple whammy hit by the move.

I would still cough out some cash to subscribe, if I had come this far of course.

Yes... but what if .... one doesn't have the extra money to spare right now to subscribe ?

times now, pretty bad ya? so if now still holding the AA shares (obviously at a lost), then very susah isn't it?

About the dilution discussion.

The current right is Redeemable Convertible unsecured Islamic debt securities (RCUIDS), not ordinary share right.

Dilution on EPS and shareholding only occur when the RCUIDS is converted to mothershare,

The RCUIDS is convertible at 1 to 1 basis, has a tenure of 7 years with 8% profit rate.

Yes, indeed very susah, one has to bite the bullet and suffer more losses.

sorry my bad, did not read the AP nor any other public doc. 8% profit rate p.a. sounds good though.

will have to read up.

The RCUIDS 8% profit rate indeed is a attraction, and may be a better alternative compared to mothershare, as the RCUIDS is convertible to mothershare 1:1.

looks good, as long as they dont do haircut on their debt again.

well.... the money from the rights issue...

ooops rights trading postponed to 6th....

slightly off .... as it relates more to AAX but.... it's a good read.

https://www.msn.com/en-my/money/topstories/...=BingNewsSearch

as one can see... the main issue was AirBus/Rolls-Royce and the lessors... that's the bulk of AAX debts....

okay Covid was one thing but it doesn't help when....

AirAsia went on a insane buying spree ( and yeah ... got that bribery scandal worth US$500 million ) ....
look, they placed an order for way too many planes... at the peak, the planes orders totaled more than 100 Billion ringgit.... yeah.. who will bare that responsibility, eh?
now AAX cannot pay...

the lessor issue...
yup... they went on an asset-light strategy ... ie... the sale of their airplanes and then they leaseback those planes...
Such strategies always debatable...
but what they did with the money is insane...
they gave the bulk away as special dividends to its shareholders...
leaving them with just bare minimum cash....
and when a Covid came....
die lor...
minimum cash at hand ....
lots of debts ....
lease obligations...
and no sale....

ahem..... surely someone needs to be responsible, yes?

and then you see the proposed usage of the rights money....

where does it go?

the bulk of it goes to... settling the fuel hedges and the paying back leases....

both again .... AA own mismanagement...

THE hedging..... at the peak... b4 Covid... the hedging were insane.
Yes... in a normal business school, they will teach that hedging is good for business...
YES indeed...
but like in most cases, abuses happen...
companies will get greedy... and attempts to over hedge ... in an attempt to WIN money from their hedges...
AA lost millions before with their hedges b4 and now it has happened again....

and this is the problem with the company ..... mismanagement.
Covid? Only exposed them.

Guess you were typing whatever that crosses your mind,
This last paragraph is spot on, although all those "..." are so annoying to read,.