Of the 332m shares to be issued at 60c 190m have already been issued to institutions. Retail clients will be offered a maximum of 142m shares. On top of that Guangdong may take up a further 88m shares (15% of company after entitlement) at 60c. That's 67% of the discounted shares going to institutions.
What concerns me is the blatant transfer of retail shareholders wealth to institutions through the unfair issue of heavily discounted shares skewed in favour of institutions. Kagara is far from the worst example but serves to make the point. I'm surprised there hasn't been more of an outcry.
Will Kagara go up or down on 10 July? no idea, but it will depend a lot more on institutions than retail shareholders.
After all this Kagara will be in essence debt free and have 677m shares. At say 80c that's a cap of $541m. Is that a fair value or not?
KZL Price at posting:
74.5¢ Sentiment: None Disclosure: Not Held
