Update on Litrak's Capital Repayment!

Blogged earlier: Christmas Is Indeed Here for Litrak!

I wrote the following:

Which brings me to this other issue on Litrak's capital repayment. I blogged on this on March 18th 2008. See Litrak may return RM1 per share!

My grave concern was how come Aseambankers research team was bang on the money on this capital repayment issue?

• According to a research note by Aseambankers, Litrak has a total debt of RM819 million as at December 2007. Assuming the entire sukuk programme was drawn up, analysts estimated that Litrak would have a cash surplus of RM726 million, which could potentially be returned to shareholders.
  
  “However, we believe that the maximum surplus amount of RM726 million may not be returned to shareholders in full, with some to be kept for future investments. Ultimately, a capital repayment of at least RM1 per share (or RM492 million in total) is more likely,” it said

Embarking on a sukuk program to incur more debts and then to give a huge chunk back to its shareholders requires extreme imagination!

So why and how did Aseambankers come out with this incredible and insane suggestion in the first place?

Did they know?

Did they?

I was alerted by Seng on an interesting fact:

LINGKARAN TRANS KOTA HOLDINGS BERHAD (“LITRAK” OR THE “COMPANY”) (I) PROPOSED CASH DISTRIBUTION OF RM1.00 TO THE SHAREHOLDERS OF LITRAK BY WAY OF CAPITAL REPAYMENT ON THE BASIS OF RM0.93 CASH (“PROPOSED CAPITAL REPAYMENT”) AND SINGLE TIER INTERIM DIVIDEND OF SEVEN (7) SEN CASH FOR EVERY ONE (1) EXISTING ORDINARY SHARE OF RM1.00 EACH HELD IN LITRAK; AND (II) PROPOSED AMENDMENT TO THE MEMORANDUM OF ASSOCIATION OF LITRAK PURSUANT TO THE PROPOSED CAPITAL REPAYMENT

And if you open that link you will see the following statement:

• On behalf of the Board of Directors of Litrak (“Board”), Aseambankers Malaysia Berhad (“Aseambankers”) is pleased to announce that the Company wishes to distribute RM1.00 cash for every one (1) existing ordinary share of RM1.00 each to the shareholders of Litrak by way of the following:

Now how about that??!!!!!!!!!!!!!!

Aseambankers is the banker!!!!!!!!!!!!!!!!!

How now my dearest MooMooCow?

Is this simply disgusting?

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Update:

I got a copy of Aseambankers report just now.

And this is what they wrote:

• As expected! Litrak’s proposed capital repayment of 93sen per share is within expectations. The capital repayment proposal came hot on the heels of a debt restructuring exercise approved by the authorities early this month – a Sukuk Issuance Programme to raise up to RM1.545b to refinance existing debts (RM819m as at Dec 07). Litrak will distribute a maximum of RM462m cash based on its current paid-up of 492m shares and assuming all 4.7m ESOS are exercised. In addition, Litrak will also pay a 7sen single tier interim dividend for FY08 (ex-date not fixed), lifting immediate payout to RM1.00. This is Litrak’s second capital repayment after an earlier 25sen per share in May 2006.

As expected???

My oh my!

How????