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What is the number of shares being sold?

  • The family that owns Malaysian gaming firm Genting Bhd sold about 853 mil shares (9%) in its Singapore unit to institutions yesterday, raising US$425 million (S$615 million).
  • ChannelNewsAsia reported that 3 substantial shareholders have sold a 1.18 bil of Genting's share.
Note: A check at SGX site initially shows that 1.18bil is the correct figure, but take note of the "deemed interest". I believe the number of shares sold is about 914 mil.

What is the reason of selling stake?
The reason should not be related to Sentosa project as Genting Singapore has always mention that the project will be on time in the first quarter of 2010 and it will not have to resort to further borrowings for the project.
It is speculated that
Genting Bhd may be a possible bidder for the MGM Grand Macau, which is expected to sell a 50% stake.

Why selling shares directly to institutional investors?
There is no earnings dilution as compared to rights issue or new share placement. To ensure that the share price doesn't collapse when selling huge amount of shares. Imagine selling 914mil shares in open mkt without support from institutional investors - scary!

Why institutional investors want to buy?
This is a way to collect huge amount of shares at a single price without pushing the price up.



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