KUALA LUMPUR: Shares of Time dotCom fell at the start of trade on Tuesday, Nov 16 after it proposed a corporate exercise but investors were unhappy with the share capital reduction and share consolidation.

At 9am, it was down 11 sen to 66 sen and there were 2.5 million shares done. Time Engineering, which had risen recently as it rode on positive news expected from Time dotCom, fell six sen to 46 sen.

The FBM KLCI was up 1.76 points to 1,503.32. Turnover was 20.12 million shars valued at RM11.9 million. There were 88 gainers, 22 losers and 84 counters unchanged.

Time dotCom is undertaking a RM339 million acquisition exercise of several companies in the telecommunication services and infrastructure industry in a bid to transform itself into a regional player. As part of the corporate exercise, it is undertaking a share capital reduction, capital repayment and the acquisition of four companies as it seeks to expand into the regional telecommunications industry.

The exercise involves a share capital reduction of its paid-up of RM2.53 billion, comprising of 2.53 billion shares of RM1 each by cancelling 90 sen of the par value, followed by a share consolidation of the 2.53 billion 10 sen shares into 506.15 million shares, on the basis of five shares of 10 sen each to one share of 50 sen each in Time dotCom.

Time dotCom also entered into two memoranda of agreements with the shareholders of Megawisra Sdn Bhd and Global Transit Ltd (Labuan) to acquire four companies for a total of RM286.5 million via the issuance of new shares and RM38.4 million cash.

The four companies are Global Transit Communications Sdn Bhd for RM106 million, Global Transit Ltd for RM105 million, Global Transit (HK) Ltd and Global Transit Singapore Pte Ltd for RM1 each and AIMS Group for RM128 million in cash and shares. It also proposed a capital repayment of RM50.61 million or two sen per TdC share.

The market never like related party transaction as there is a tendency to overvalue the acquiree companies and issue undervalue shares.

In this instant, the shares to be issued are price based on the average price for the past few days and the point to note is are the companies to be acquired are priced fairly.

Even Genting will be sold down in its related party transactions.

mcb!

Rosdi,

To my understanding par value for this stock is RM1 and it will decrease to RM0.10 cents. So by right the current share price to be divided by 10 to reflect the latest par value which is 63 / 10 = 6.3 cent/share? There's possibility this stock may happen this way thus do you think it may happened?

No it is  wrong.

There would be an ex price , even higher than the day quoted before  ex price.

Let say the share was trading at 60sen on the last say. The next day would be adjusted to rm 3.00 ( 60sen x 5 ).

But you would have 200 shares instead 1000 shares before the capital reduction. Maybe 10sen adjustment for money paying back to you.

Correct me if I am wrong.

We know that this company has not enough money to expand their broadband services to most Malaysians. Their Webbit was terminated, they were almost sold to STT. They sold off their 017 network to Maxis..

Question is how can this acquisition of Megawisra Sdn Bhd and Global Transit Ltd help out in realizing their expansion plans? Put it this way, they aim to be Malaysia's 2nd largest fixed line provider. All along Global Transit and Time were closely related. Even with or without the acquisition, things could also proceed as it be.

Is there some money circulation involvement going on here?

They have 500m worth of DIGI shares plus cash in banks.

Are you talking about 5 to 10 years ago.

Plse go to their website to gather more information.

This comes from the selling of their assets in exchange for the deal with DiGi previously. Building new networks and expansion would mean a start over again initiative?

Take it this way. Say I have a property which is worth RM1m when I sell it now I wouldn't be able to buy something similar but to opt for something less.

500m is peanuts to build a new fixed line network that would rival TM's.

They have 500m worth of DIGI shares plus cash in banks.

Are you talking about 5 to 10 years ago ?

Expansion must come with a profit in mind. It is like setting up in the most remote part of E Malaysia where there is no market.

Plse go to their website to gather more information.

<<
Loss on disposal of DiGi shares - RM’000 (23,052)

On 15 January 2009, the Group through its subsidiary, Hakikat Pasti Sdn Bhd disposed 22,500,000 shares held in DiGi
(“Disposal Shares”), representing about 2.9% of the then existing issued and paid-up share capital of DiGi. The total cost of
investment for the Disposal Shares was RM484.23 million (equivalent to RM21.52 per DiGi share). Nevertheless, since it first
held the Disposal Shares (i.e. 22,500,000 DiGi shares) in November 2007, the Group has received an aggregate net dividend
income of RM43.43 million (equivalent to approximately RM1.93 per share) in respect of the said shares.
>>

As per disclosure in 31Mar2010 quarterly report

They can easily sell off the company to DIGI.........
for telco license....

No it is  wrong.

There would be an ex price , even higher than the day quoted before  ex price.

Let say the share was trading at 60sen on the last say. The next day would be adjusted to rm 3.00 ( 60sen x 5 ).

But you would have 200 shares instead 1000 shares before the capital reduction. Maybe 10sen adjustment for money paying back to you.

Correct me if I am wrong.

Ya, it is better to sell off the company to another capable party.

And Then let the share price jumps to rm 1.50.

One report says some institution funds could be collecting in the midst of confusion faced by small timers.

Do not really like the way they do things, and let small timers suffer.

1Malaysia concept  is in doubt.