UnUsUaL
02-11-2017, 06:51 PM
Most highly UnUsUal, indeed!
I recalled a similar post you made on such maneuvers when I saw the odd number of bonus issue.  (02-11-2017, 06:51 PM)karlmarx Wrote: Most highly UnUsUal, indeed! That should be in the Penguin thread, when some Penguin-ites were still debating why the odd ratio of the share consolidation - Some said it was probably because Mgt didn't want to (1) increase absolute share price by too much and reduce share count liquidity - ie. OPMI friendly behavior or (2) do multiple consolidations if share price continues to drop....but i like to believe the truth is most probably far from either. Such odd ratios work both ways then - dividing the same pie into more parts (bonus) or less parts (share consolidation), for the benefit of the major shareholder. Sometimes, this trick is also used when companies spin off their subsidiary via capital reduction and distribute all the shares to shareholders. Unless it is 1 subsidiary share for 1 mother share (like what PanUnited does for its XingHua Group's spin off) or other friendlier ratios, i have met occurrences like "0.9437 subsidiary share for 1 parent share" (with fractional shares disregarded again) to penalize OPMIs as well.
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
03-11-2017, 01:44 PM
(This post was last modified: 03-11-2017, 01:46 PM by cif5000.
Edit Reason: Update table
)
(02-11-2017, 02:55 PM)weijian Wrote: It seems like the corporate exercise is a 3 for 5 "bonus" issue, announced yesterday. Since Unusual shares (share count: 643,237,059) are traded in lots of 100 and there are no shareholders with less than 100 shares, the dilution due to elimination of fractional entitlements is not as severe as the hypothetical company. Just by a 10x increase in share count, the problem miraculously disappears. Original share count (%) Bonus entitlement (share count) Share count after bonus issue (%) A 2080 (79.39%) 1248 2080+1248= 3328 (79.39%) B 180 (6.87%) 108 180+108 = 288 (6.87%) C 180 (6.87%) 108 180+108 = 288 (6.87%) D 180 (6.87%) 108 180+108 = 28 (6.87%) Total 2620 (100%)
04-11-2017, 07:48 AM
(03-11-2017, 01:44 PM)cif5000 Wrote: Since Unusual shares (share count: 643,237,059) are traded in lots of 100 and there are no shareholders with less than 100 shares, the dilution due to elimination of fractional entitlements is not as severe as the hypothetical company. hi cif5000, you are right that i have UnUsually exaggerated the problem! Thanks for pointing out the diff between theory and practice.
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
MM2 Asia owns 51% of Unusual Management Pte Ltd, who in turn has 79% ownership of Unusual
MM2 Asia used its portion of these shares to borrow money from 02 brokers. Now that MM2 asia is in a cash bind and Unusual share prices have fallen, the 02 brokers have issued margin calls and are selling Unusual shares to pare down the loan owed by MM2 Asia. Do note this is just paring down the loan to maintain the minimum margin threshold. However, I expect if Unusual falls by another 10%, we could be seeing another wave of forced selling. Over the past few days, we have seen increased trading volume https://links.sgx.com/FileOpen/_Form%203...eID=868974
MM2 asia's shares in Unusual has been force sold from 5.6 cents all the way down to 3 cents!
Its an interesting case to look at which the largest shareholder has faced a cash crunch and has its shares sold off to maintain the margin ratio with the brokerage. Considering the usual 130% margin ratio, with Unusual share price having fallen by 46% in 1.5 months due to CGS brokerage force selling shares nearly every trading day. I expect further selling pressure on Unusual shares. Interestingly at the start of 2025, Unusual had performed share buybacks at 7 cents level. However, recently due to the force selling of shares of its largest shareholders, Unusual has not done any share buyback despite having a large cash pile with minimal debt on its balance sheet.
Upon further reading on UMPL (Unusual largest shareholder), a few interesting things have been observed surrounding the 791,203,041 shares owned by UMPL. As a recap, MM2 Asia owns 51% of UMPL, and one would think this means MM2 Asia has only 403,513,550 Unusual shares. However, it seems things are not simple and MM2 has effective control of UMPL's assets beyond the economic stake MM2 Asia is entitled to
https://links.sgx.com/FileOpen/mm2%20%20...eID=866434 In UOB's letter of demand for debt owed by MM2 Asia, UMPL had given UOB control of 623,040,780 shares in UnUsUaL Limited which UOB has the rights to exercise the sale. This is more than the 51% of shareholding MM2 Asis owns in UMPL. This suggests a portion of shares not owned by MM2 Asia were used to pledged as collateral for MM2 Asia. The whole 623,040,780 shares are now in danger of being taken by UOB Second, in the recent margin call by Haitong and CGS International of Unusual shares, it reveals that a separate approx. 100 million shares were used as collateral by MM2 Asia for a margin loan. The margin ratio has been breached and both brokerages has sold close to 72 million in unusual shares with share prices falling from 7.6 cents down to 2.6 cents. These suggests MM2 Asia has almost an entire control of the 791 million shares of UMPL despite owning a 51% economic stake. Third, what's interesting is that Unusual Management had been buying back shares at the lowest price of 7.5 SG cents but since the letter of demand had occurred, Unusual has not done any share buyback even at 3 Sg cents and the company has positive cashflow. Fourth, Hildric Capital founded by Wee Teng Cheun is in talks with MM2 Asia to fund a liquidity injection and has been buying up shares in Unusual Limited as the share prices fall. Wee Teng Cheun is the grandson of the late UOB founder oand had left UOB to set up his own fund of Hildric Capital. After laying out this information, I can see connections among the parties, and it is apparent there seems to be a battle of 2 sides. We can't exactly link what's going on but there seems to be something happening and uniquely UOB has issued letter of demands to all of MM2 entities in MM2 Asia, Unusual Management and another MM2 company Vividthree, of which Hildrics Capital are involved in all 3 |
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