Notion Special Issues of Shares

My Dearest Alvan,

• Recently, if you read the announcement properly, Notion's major shareholders sold off portion of their shares to comply with with NEP requirement (i.e. 30% bumiputra spread). So, they are not diposing it because of the change in prospect or fundamental. Furthermore, there is no new share issued, so there is no dilution of share value. Correct me if I am wrong.

Subject: NOTION VTEC BERHAD ("NOTION" or "Company") I. PROPOSED BONUS ISSUE II. PROPOSED SPECIAL ISSUE III. PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL IV. PROPOSED AMENDMENTS TO THE COMPANY'S MEMORANDUM OF ASSOCIATION (COLLECTIVELY REFERRED TO AS THE "PROPOSALS")

If you read that announcement,

• 1. (b) special issue of 103,500,000 new NOTION Shares ("Special Issue Shares"), representing 17.65% of the enlarged issued and paid-up share capital of NOTION (after the Proposed Bonus Issue), to Bumiputera investors to be approved by the Ministry of International Trade and Industry ("MITI") at an issue price to be determined later ("Proposed Special Issue");

If you open up that Wordfile attached, you will see a table which clearly states what is happening.

Or you can see the screenshot below.



At the end, AFTER the proposed special issue, Notion was supposed to have an enlarged share capital of 689.819 million shares.

So correct me if I am wrong, after the special issue, the share based is enlarged. Is this not a dilution of earnings?

Some interesting links which shows the extension of time and the revisions made on this special issue of shares.

30th Nov 2006, Notion made a revision to this special issue: NOTION VTEC BERHAD ("NOTION" or "Company") Revisions to the Special Issue

22nd Jan 2007. Notion made an extension. NOTION VTEC BERHAD ("NOTION" or "Company") Extension of time to comply with the 30% Bumiputera Equity Condition

27th March 2007. Another extension. NOTION VTEC BERHAD ("NOTION" or "Company") Extension of time to comply with the 30% Bumiputera Equity Condition

17th May 2007. Another extension. NOTION VTEC BERHAD ("NOTION" or "Company") - Revision to the Promoters' Placement; and - Extension of time to comply with the 30% Bumiputera Equity Condition

• On behalf of the Board of Directors of NOTION, HWANGDBS Investment Bank Berhad (formerly known as Hwang-DBS Investment Bank Berhad) (formerly known as Hwang-DBS Securities Berhad), is pleased to announce that the Ministry of International Trade and Industry ("MITI") has, vide its letter dated 15 May 2007 (which was received on 16 May 2007) taken note and has no objections to the following:
  
  (i) Revision to the collective placement of existing ordinary shares of RM0.10 each in NOTION ("Notion Shares") by the promoters of NOTION, from 125,895,000 to 147,500,000 NOTION Shares to Bumiputera investors to be approved by the MITI ("Promoters' Placement"); and
  
  (ii) Out of the 147,500,000 NOTION Shares, the remaining balance of 51,000,000 NOTION Shares will be allocated by the MITI to Bumiputera investors to be identified later.
  
  MITI is agreeable to the above, provided that the Company obtains the approval of the Securities Commission ("SC") for the Promoters' Placement, and complies with the Guidelines on the Acquisition of Interests, Take-Overs and Mergers by Local and Foreign Interests.
  
  In this regard, the SC's approval was obtained on 4 April 2007.
  
  This announcement is dated 17 May 2007.

Quote: Out of the 147,500,000 NOTION Shares, the remaining balance of 51,000,000 NOTION Shares will be allocated by the MITI to Bumiputera investors to be identified later.

How?