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Latest Forum Topics / China Paper  Post Reply

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Jackpot2010
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20-Apr-2012 21:59     
 
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China Paper was replying to this letter:

PUBLISHED APRIL 18, 2012
LETTER TO THE EDITOR
SGX should be wary of approving rights issues

IT is alarming to note that some listed companies in the Singapore Exchange (SGX) are frequently calling for rights issues. One recent case in point is China Paper Holdings Ltd which is proposing a one-for-one rights issue at 3.6 cents, purportedly to raise money for business expansion.

Just two years ago, the same company had called for another rights issue for a similar purpose. The share price, which was trading at approximately 20-plus cents, dropped to about 10 cents. After this latest rights issue announcement, the share price has plummeted to about 4 cents. All this while, the company has been profitable and according to its financial reports, holds a fairly substantial amount of cash with net tangible assets worth close to 30 cents.

What is worrying is that this company could then engineer to take itself private at a pittance offer price, which would cause big losses for shareholders. One of the company's independent directors has just resigned. To protect shareholders, the SGX could perhaps be more circumspect before approving such indiscriminate calls for rights issues.

Leong Onn Kwong

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teeth53
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20-Apr-2012 21:34     
 
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Privatisation Speculations
The Board has enquired and Mr Chen Yong (Exe chairman of the Board and controlling shareholder of the Co) has represented that he has no intention to privatise the Co. The Board is also not aware of any privatisation intention by any other party.

Free me, and after. It coming soon...Happi Trading.
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freeme
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03-Apr-2012 11:15     
 
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) tks,

 

btw when i say buy below 3.6c is after rights le..   hopefully

Jackpot2010      ( Date: 02-Apr-2012 11:50) Posted:



Some very good advice from Freeme (see his recent post below).

but i doubt px will fall below 3.6c (as suggested therein). otherwise this rights issue hv to be aborted, something unthinkable!  px did hit a low of 4.1c this morning down 32% from Fri closed.

taking it private is likely too, since its business is profitable plus ridiculously high NAV of Rmb 1.62 (S$0.33 per share) but roughly 60% of shares are being held by public, privatisation may take some time.

the alternative view is that its strong balance sheet is fake. having zero gearing may be bad news too, IF it is not rated credit-worthy by China Banks and unable to secure loans?

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teeth53
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02-Apr-2012 21:49     
 
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Oop..typo err...if it ever...and not if it even...

teeth53      ( Date: 02-Apr-2012 21:47) Posted:

Me, awaiting for timing, if it even fall below offer price - can buy abit to keep (small small interest only)

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teeth53
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02-Apr-2012 21:47     
 
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Me, awaiting for timing, if it even fall below offer price - can buy abit to keep (small small interest only)
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