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Fully diluted shares represent the total number of shares that would exist if all convertible securities, such as CCPS (Compulsorily Convertible Preference Shares), were converted to equity. This calculation helps companies and investors understand the potential dilution of ownership over time. Consider this example: - Your cap table currently has 1,000,000 equity shares. - You’ve issued 100,000 CCPS, each convertible into 2 equity shares. Now, a new investor comes in and buys 150,000 shares for $1,500,000, calculating their ownership as 13.04% [(150,000/1,150,000)*100 of the company. However, on a fully diluted basis, accounting for the eventual conversion of CCPS, their actual ownership is only 11.11% [(150,000/1,350,000)*100]. Without visibility into these CCPS, the new investor could be surprised by a significant dilution of their stake when conversions happen in the future.

The Sun-Star Investment Group Requests HoSE to Reconsider Delisting SJF Shares https://ift.tt/lp3j2uq Sunrise Investment Joint Stock Company has responded to Document No. 1658/SGDHCM-NY regarding the mandatory delisting of SJF shares. The response was addressed to the State Securities Commission of Vietnam and the Ho Chi Minh City Stock Exchange (HoSE). In the response, Sunrise Investment stated that they are currently focused on gathering and providing the required documents for the audit firm to conduct an interim review of the financial statements for the period from January 1, 2024, to June 30, 2024, and the audit of the financial statements for the fiscal year ending December 31, 2024. Given the substantial volume of documentation, the auditors require additional time to review the files. Therefore, Sunrise Investment requested an extension for submitting the 2024 semi-annual reviewed financial statements until November 8, 2024. Illustrative Image Concurrently, Sunrise Investment appealed to HoSE to carefully consider their decision regarding the potential delisting of SJF shares, as it would directly impact the interests of over 6,600 shareholders and the company’s employees. Previously, on October 17, 2024, HoSE had announced its intention to consider the mandatory delisting of SJF shares. This decision by HoSE was based on the provisions of Point o, Clause 1, Article 120 of Decree 155/2020/ND-CP dated December 31, 2020, as well as the opinions of the State Securities Commission and the Vietnam Stock Exchange. HoSE asserted that since the trading suspension, Sunrise Investment has continued to violate information disclosure regulations, and these violations are likely to persist, seriously infringing on the information disclosure obligations and affecting shareholders’ rights. It is important to note that SJF shares of Sunrise Investment are currently under a trading suspension, as per Decision No. 726/QD-SGDHCM dated November 6, 2023, issued by the General Director of HoSE, due to repeated violations of information disclosure regulations on the stock market, even after being placed under trading restrictions. On April 16, 2024, SJF was further placed under control based on two decisions by the General Director of HoSE. These decisions were made due to the external audit firm’s qualified opinions on the audited financial statements for two consecutive years (2022 and 2023) and the negative after-tax profit of the parent company in the audited consolidated financial statements for 2022 and 2023. Also, on April 16, 2024, SJF shares were put on a warning status due to the negative after-tax profit recorded in the company’s 2023 audited consolidated financial statements. You may also like The Foreign Sell-Off: Unraveling the 24th October Session’s Nearly 300 Billion Dong Sell-off by Foreign Investors – Which Stock was the Epicenter? “Foreign...

“ASEANSC Offers 50 Million Shares to Boost Capital to VND 1,500 Billion” https://ift.tt/pxY0lva Asean Securities JSC (AseanSc) has announced that it seeks shareholder approval for its plan to offer shares to existing shareholders. According to the plan, the list of shareholders participating in the opinion poll will be finalized on December 6, 2024, after which shareholders will provide their opinions and submit the poll forms to AseanSc no later than 4:00 PM on December 17, 2024. Specifically, the Board of Directors proposes to the General Meeting of Shareholders to approve the plan to increase capital by offering 50 million shares to existing shareholders. The entitlement ratio is 2:1, meaning that for every 2 shares owned, shareholders will be entitled to buy 1 new share. The offering price will not be lower than VND 10,000 per share, with a maximum expected offering value of VND 500 billion. All shares offered to existing shareholders will not be restricted from transfer. Any remaining shares that are not purchased during this offering will be offered to other shareholders or investors and will be subject to a one-year transfer restriction from the end of the offering period. The offering period is scheduled for 2024 – 2025, subject to the actual situation and approval from the competent state authorities. If the offering of 50 million shares is successful as planned, AseanSc’s charter capital will increase from VND 1,000 billion to VND 1,500 billion. Source: AseanSc With the expected proceeds of VND 500 billion from this offering, AseanSc plans to allocate VND 350 billion to supplement capital for securities lending, pre-sale of securities, and underwriting activities. VND 100 billion will be used for proprietary trading and other investment activities in accordance with legal regulations, and VND 50 billion will be invested in upgrading information technology systems, machinery, equipment, and improving physical infrastructure to support the company’s business operations. The disbursement is expected to take place in 2025. Prior to this, AseanSc’s latest capital increase was in 2017, when its charter capital increased from VND 500 billion to VND 1,000 billion. You may also like “MIG Shareholders’ Privilege: Exercising Share Purchase Rights at a 15% Ratio.” The Military Insurance Joint Stock Corporation (HOSE: MIG) has announced a shareholder registration date for the renounceable rights issue, offering a 15% subscription ratio. The record date has been set for 9th December 2024, with the entitlement date being one day prior. The Steelmaker’s Stock Offering: A Bold Move to Forge a Brighter Future “Nam Kim Steel Joint Stock Company (HOSE: NKG) has just announced the record date for its upcoming share offering, which is expected to raise nearly VND 1,600...

Analyzing Investment Holding Companies: Key Factors to Consider In my blog post on investment holding companies, I have tried to explain the key factors investors should consider when analyzing IHCs and ICs: - Dividend policy and distribution of earnings - Quality and track record of management - Alignment of majority and minority shareholder interests - Transparency and complexity of the holding company structure - Regulatory environment and potential for value unlocking By carefully evaluating these factors, investors can make more informed decisions when investing in holding companies trading at discounted valuations. The blog post aims to provide meaningful insights for analyzing investment holding companies beyond just the discount to net asset value. I encourage you to read the full blog post to gain a deeper understanding of the nuances involved in analyzing this space. The insights shared can help investors navigate the opportunities and risks associated with holding company discounts. #Investmetholdingcompany #IHC #IC #BBTC #KICL #KAMAHOLDING #SUMMITSECURITIES

In many jurisdictions, treasury shares are shares reacquired by a company which, instead of being cancelled on their re-acquisition, are held by the company in its “treasury” or are dormant until reissue or resale. This approach allows flexibility, as treasury shares are exempt from shareholders’ pre-emptive rights, enabling companies to reissue them without first offering them to existing shareholders. However, under the South African Companies Act, 2008, reacquired shares must be canceled and revert to authorised share capital, which the company may later reissue (Section 35(5)). An exception to the rule against treasury shares is made by permitting a subsidiary to acquire and hold up to 10% in aggregate of the issued shares of any class of shares of its parent company (section 48(2)(b)). Since a company cannot hold an ownership interest in itself, section 48(2)(b)(ii) specifies that a subsidiary may not exercise any voting rights attached to shares it holds in its parent company. However, nothing is stated about dividend rights, nor are there restrictions on selling these shares. Treasury shares occupy a unique position: they are non-voting, do not count toward quorum requirements, and remain accessible for future transactions. In this way, they offer flexibility, reducing the administrative burden of canceling and reissuing shares. ______________________________ ✨ Our Company acts for corporate buyers, sellers, investors, private equity funds, and the like. Feel free to reach out to us if you would like to book a consultation. ✨✨ If you like reading these “One-Liners”, please click the 🔔 (on my profile) so you don’t miss any new posts and please let me know your comments and share with others.

The recently amended SEBI (Delisting of Equity Shares) Regulations, 2021, which became effective on September 25, 2024, signify a pivotal shift in India’s delisting framework, aiming to streamline the process while ensuring the protection of minority shareholders. One of the most significant changes is the introduction of the fixed price mechanism as an alternative to the existing Reverse Book Building (RBB) process for voluntary delisting of companies with frequently traded shares. Under this new mechanism, acquirers can propose a fixed price to repurchase all publicly held shares, provided the offer is at least 15% higher than the floor price calculated as per regulations. This approach enhances flexibility for companies and ensures that minority shareholders receive a fair premium for their shares. Modifications to the RBB process further strengthen shareholder protections. The threshold for initiating a counter-offer has been reduced from 90% to 75% of public shareholding, contingent upon at least 50% of the public shares being tendered. Additionally, the counter-offer price must not be lower than the higher of the volume-weighted average price of shares tendered in the RBB or the indicative price offered by the acquirer. Delisting will now be considered successful only when the acquirer’s post-offer aggregate shareholding reaches 90% of the total issued shares. Furthermore, SEBI has introduced adjusted book value as an additional parameter for determining the floor price for both frequently and infrequently traded shares, excluding Public Sector Undertakings (PSUs). A separate framework has been established for delisting Investment Holding Companies (IHCs). IHCs holding at least 75% of their fair value in direct investments in equity shares of other listed companies can delist by proportionately transferring these underlying shares to public shareholders and making cash payments for other assets. The rationale behind these amendments is multifaceted. By introducing the fixed price mechanism and modifying the RBB process, SEBI aims to facilitate ease of doing business for listed firms, reduce the potential for market manipulation during delisting announcements, and protect the interests of minority shareholders. The new regulations also address valuation disparities, particularly for Investment Holding Companies, thereby enhancing market confidence. From a legal standpoint, the amendments impose stricter compliance responsibilities on acquirers and enhance the role of the board of directors in the delisting process. Acquirers and their concert parties are now legally accountable for ensuring regulatory compliance, bearing all expenses related to the delisting offer, and managing due diligence through independent committees. Boards must appoint independent company secretaries and form committees of independent directors to oversee the process, reinforcing governance standards and safeguarding shareholder interests. #sebi

I started a New 5 Days Series Naming “ The Commerce Thing “ ( Second Article ) Today I want to share about “ Equity “ This term is often used in finance to represent ownership in a company, typically referring to the value of shares issued. The Indian Companies Act 2013 recognises 7 types of companies based on size, no of members, control,liability, listing, intended business activity and country of origin. 1. OPC( one person company) 2. Private limited company 3. Public company 4. Sole proprietorship 5. Partnership 6. Limited liability partnership (LLP) 7. Section 8 company (NGO) Equity generally refers to Public company/ Public limited company. Beacause they are authorised to raise money from public for their business operations . Companies can issue three types of shares Preference shares, Equity shares and non-voting shares. A share, also known as stock or equity, is a unit of ownership in a company. When a person buys shares in a company, they become a shareholder and part owner of the company. 🎯Equity share holders are the owners of the company with high potential returns as well as risk tolerance. 🎯Preference share are for cautious investors who want a steady and consistent returns on their investment. 🎯Non-voting share are issued to family members of Directors or Board members to raise money without diluting control as they do not carry voting rights in general body meetings and other matters. The return given to shareholders is called’ Dividend’ . Let’s understand with the help of an example Company has Rs 10 lakh of Net Profit ( after deducting all expenses) and Prefernce shareholders has 10% returns ( which is fixed at the time of issue) will be given first. Rest profit goes to equity shareholders as per decision on how much to reinvest . So equity shares are either in maximum profit or loss , that’s why they are called as risk- takers as well. The amount a company pays out in dividends relative to its net income is called the dividend payout ratio. At the time of investment in shares, this is an important element to consider. #equityshares #preferenceshares #shares #publiclimitedcompany.

Nairative 3 - Anti-Dilution Provisions in Private Equity In private equity, protecting investor interests (particularly, those of early movers), during subsequent fundraising rounds is critical. A specified clause can help safeguard investors from the dilution of their ownership when new shares are issued at a lower valuation than their initial investment, commonly referred to as a “down round.” There are two main types of anti-dilution protection: 1. Full Ratchet: Investors’ shares are adjusted as if they had invested at the lower price, maintaining their percentage ownership despite the new round. Example: Rahul buys 10% of a company by purchasing 1,00,000 shares at ₹100 per share, giving the company a valuation of ₹10 crore. Later, the company faces challenges and issues new shares at a down round price of ₹50 per share. Under the full ratchet provision, Rahul's shares are adjusted as if he had initially bought them at the new price of ₹50 per share. As a result, his ownership is recalculated to 2,00,000 shares, maintaining a 10% ownership, despite the drop in valuation and issuance of more shares. 2. Weighted Average: Adjustments are made based on the number of new shares issued and the price, offering a more balanced approach. 2.1. Narrow-Based Weighted Average: This approach only considers the number of shares outstanding before the new issuance, excluding any option pools. While it offers some protection, it’s often seen as less favorable to investors since it doesn’t account for shares that might dilute ownership in the future. 2.2. Broad-Based Weighted Average: This method takes a broader view by including all potential dilution sources, such as stock options and convertible securities, when adjusting the share price. This results in better protection for investors while still balancing the interests of the company and its shareholders. In cross-border deals, these provisions need to be carefully crafted to align with different jurisdictions’ laws and governance practices. Misalignment can lead to enforceability issues, tax complications, or even disputes between shareholders. #PrivateEquity #AntiDilution #InvestorProtection #CrossBorderDeals #CorporateLaw #Fundraising

After a market consultation held in late 2023, the Stock Exchange of Hong Kong Limited will permit listed companies to hold their own #shares as treasury shares and introduced rules for companies to resell them, effective 11 June 2024. Paloma Wang  Kai Sun  Anthony Pang  Lillian Lian  Martina To #capitalmarkets #asiapacific