PRTASCO [5070]

PROTASCO has announced for Proposed Private Placement and Proposed Bonus Issue on 12/12/2013.

(A) PROPOSED PRIVATE PLACEMENT

Private placement is up to 50,000,000 new ordinary shares(representing approximately 15.93% of the issued and paid-up share capital of 313,956,490 Protasco Shares), together with up to 100,000,000 new detachable Warrants on the basis of 2 Warrants for every 1 Placement Share. Price: RM1.65.

(B) PROPOSED BONUS ISSUE

Bonus issue of up to 33,546,259 free Warrants on the basis of 1 Warrant for every 10 existing Protasco Shares held by shareholders of Protasco. Price: RM2.00.

Based on current share price of RM1.40 as of 12/01/2014, who is willing to pay RM1.65 to subscribe for the Private Placement and who wants to exercise his warrants at RM2.00? Why not the new investors buy from the open market?

Let me tell you something. If the new investors were to buy 15.93% shares from open market, this will push the share price to sky high. A price that will definitely higher than RM1.65.

Besides, based on the exercise price of warrants meaning that the management of PROTASCO is so confident that the share price of the company will worth at least RM2.00 in near term. Why??

Based on the analysis from Y2K, the company has so many projects on hand, the projected EPS is so so attractive!

Look at below for Y2K's analysis:

1. Awarded with RM578.5mil contract value to build 1Malaysia housing and to be complete within 24 months. The work is expected to be start by early of next year. Assume net profit margin is 15%, it will contribute about eps 12sen per year. If the existing business can sustain as per last year, this mean the contribution from this contract is possible to double up its eps. (100% growth in eps)

2. Acquisition on an Indonesia O&G company is still in progress. The pending work is mainly due to the confirmation of contract extension for another 10years for the O&G company that they are going to acquire. If succeed, there will be a profit guarantee before tax for about USD55mil. If the tax rate is 25%, it will roughly contribute about eps 7-8sen.

3. Its De Centrum property development which valued at RM6 billion (estimation) is able to sustain for another 10-15years. By taking 10 years as completion target timeframe, it will able to contribute RM600mil revenue per year for the company.

4. By considering other newly awarded contracts (since Dec-12 until Sep-13) and operation cost is under control, another eps 3-5sen will not be a problem.

5. Company is returning to Libya after halting operations there due to a revolution. Company has written off RM20m in provision in the past two years for the halted operations in Libya. According to MD, Libya is promise to pay back on the provision (not sure is in full or partial amount). Thus, there is no extra expense to be taken out to continue the works there.

6. In 2014 Malaysia Budget, RM4.1bil to be provided for basic rural infrastructure projects, including RM980mil to upgrade 437km of rural road networks nationwide and RM500mil for Pan-Borneo Highway project. If the company manage to get some of the contracts, it will definitely increasing its revenue.

(Taken from http://whytoocare-y2k.blogspot.com/2013/12/5070-prtasco.html)

I have accumulated some PROTASCO shares in the past 1 month, it's now one of my major investment. Anyway, I'm not asking you to buy, if you want to buy, buy at your own risk.

PROTASCO BERHAD

Type	Announcement
Subject	NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) COMBINATION OF NEW ISSUE OF SECURITIES
Description	PROTASCO BERHAD (“PROTASCO” OR THE “COMPANY”) (A) PROPOSED PRIVATE PLACEMENT OF UP TO 50,000,000 NEW ORDINARY SHARES OF RM0.50 EACH IN PROTASCO (“PROTASCO SHARES”) (“PLACEMENT SHARES”) TOGETHER WITH UP TO 100,000,000 NEW DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF TWO (2) WARRANTS FOR EVERY ONE (1) PLACEMENT SHARE (“PROPOSED PRIVATE PLACEMENT”); AND (B) PROPOSED BONUS ISSUE OF UP TO 33,546,259 FREE WARRANTS ON THE BASIS OF ONE (1) FREE WARRANT FOR EVERY TEN (10) EXISTING PROTASCO SHARES (“PROPOSED BONUS ISSUE OF WARRANTS”) (COLLECTIVELY REFERRED TO AS THE “PROPOSALS”)
This announcement is dated 12 December 2013. On behalf of the Board of Directors of Protasco (“Board”), AmInvestment Bank Berhad (“AmInvestment Bank”) is pleased to announce that the Company proposes to undertake the following:-  (a) proposed private placement of up to 50,000,000 Placement Shares together with up to 100,000,000 new detachable Warrants on the basis of two (2) Warrants for every one (1) Placement Share; and  (b) proposed bonus issue of up to 33,546,259 free Warrants on the basis of one (1) Warrant for every ten (10) existing Protasco Shares held by shareholders of Protasco on an entitlement date to be determined and announced later by the Board (“Entitlement Date”).