AN article in BizWeek of March 29 entitled Renong revamp: The good and bad contained some errors. Renong shareholders will NOT be required to pay any cash in ex-change for shares in a newco (to be renamed UEM World).
They will exchange 4 Renong shares with a par value of 50 sen each for 1 newco share with a par value of RM1 each to be issued at a price of RM1.60. This means that each Renong share is valued at 40 sen each.
The NTA of Renong is 5.87 sen per share while its revalued net asset value is .25 sen per share. Upon completion of the restructuring plan, the profoma NTA backing of UEM World will be 67 sen per share (i.e. 16.7 sen per current Renong share based on the 1-for-4 ex-change).
Also it was UEM and not Kha-zanah Nasional Bhd that subscribed to RM400mil worth of new shares in Renong via a private placement. This subscription was effected by way of partial redemption of RM400mil worth of Renong SPV Bond held by UEM.
The UEM group said that the restructuring proposals announced on March 27 are “clearly beneficial to shareholders” and that Renong directors are of the opinion that the proposals are in the best interest of the company.
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