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 Be the first to like this.   compoundingeffect Instrument Category : Securities of PLC Instrument Type : Preference Shares Description : 106,441,367 NEW REDEEMABLE PREFERENCE SHARES IN OMESTI BERHAD ("OMESTI") ("RPS") ISSUED PURSUANT TO THE RENOUNCEABLE RIGHTS ISSUE ("RIGHTS ISSUE OF RPS WITH WARRANTS") Initial Listing Information : Listing Date : 07/04/2021 Issue Date : 01/04/2021 Issue / Ask Price : Malaysian Ringgit (MYR) 1.0000 Issue Size in Unit : 106,441,367.0000 Maturity Date : 31/03/2026 Revised Maturity Date : Name of Guarantor: Not Applicable Name of Trustee: Not Applicable Coupon/Profit/Interest/Payment Rate: Cumulative gross preferential dividend rate out of the distributable profits of Omesti, at a fixed rate of 5.0% per annum based on the issue price of RM1.00 per RPS. Coupon/Profit/Interest/Payment Frequency: The dividends for the RPS shall be paid every 6 months period ending 30th June and 31st December of each year, with the first dividend payment to be paid either on 30th June or 31st December, commencing on or after 30th June 2021, wherein the dividend rate of 5.0% per annum shall be pro-rated from the date of issuance of the RPS. The last dividend payment shall be made on the Maturity Date. Redemption: The Company may at its option and discretion redeem any of the RPS on a pro-rata basis at 100% of the Issue Price at any time during the tenure of the RPS up to the Maturity Date by giving not less than 7 business days notice of its intention to do so.Any outstanding RPS as at the Maturity Date which have not already been redeemed by the Company shall be mandatorily redeemed by the Company. Exercise/Conversion Period : 5.00 Year(s) Revised Exercise/Conversion Period : Not Applicable Exercise/ Strike/ Conversion Price : Malaysian Ringgit (MYR) 0.0000 Revised Exercise/ Strike/ Conversion Price : Exercise/ Conversion Ratio : 0 Revised Exercise/ Conversion Ratio : Mode of Satisfaction of Exercise/Conversion Price : Not Applicable Settlement Type/ Convertible into : Cash Remarks : This announcement is dated 6 April 2021. 08/03/2024 9:38 AM compoundingeffect according to the terms sheet, nothing is exciting on the current yield, i.e. 5/0.875=5.7% p.a. You may get this type of yield in most good dividend-paying companies or REITs. The most interesting part is the redemption mode of the RCPS which stated Any outstanding RPS as at the Maturity Date which have not already been redeemed by the Company shall be mandatorily redeemed by the Company.Any outstanding RPS as of the Maturity Date which have not already been redeemed by the Company shall be mandatorily redeemed by the Company.Any outstanding RPS as at the Maturity Date which have not already been redeemed by the Company shall be mandatorily redeemed by the Company. That means with the current price of 0.875, RCPS shall get back RM1.00 in two years on maturity. So, the actual YTM={(1-0.875)+0.05+0.05}/0.875=25.7% / 2= 12.85% p.a The only risk the the risk of the company being unable to redeem the RCPS on redemption due to financial constraints. (This serves as a academic sharing purpose and not a recommendation to buy or sell!!!) 08/03/2024 9:51 AM pkchong The YTM looked very attractive but wondering how and where the company will get the $$$ needed to redeem the RPS. 24/03/2024 8:21 PM  Sslee Another RI of RPS to redeem the mature RPS. It is almost like refinance to finance the retired loan. 24/03/2024 8:50 PM | |
