DBS raising 27% of mkt cap via rights issue

[Black Swan]

***Citi is Joint Lead Manager and Joint Underwriter*** ***Reg S and 4(2) placement to QIBs in the US*** No email distribution in US***

DBS Group Holdings Ltd (DBS SP) has announced terms for its S$4.1bn Renounceable Underwritten Rights Issue. Please click on link for announcement:
http://info.sgx.com/webcorannc.nsf/...ew&RestrictToCategory=DDBS GROUP HOLDINGS LTD

The offering is a proactive measure to further strengthen DBS' Capital Ratio. The bank's Core Tier-1 ratio will incease from 7.8% to 9.9% and its Tier-1 ratio will increase from 9.7% to 11.8% post the rights issue

Transaction Details
Transaction Structure: Renounceable Underwritten Rights Issue
Issue Size: S$4.1 bn
Number of Rights Shares: 760,480,229 shares
Rights Ratio: 1 Rights Shares for 2 existing shares
Rights Price: S$5.42
TERP: S$8.37
Discount to Last Close: 45.0%
Discount to TERP: 35.3%
Rights Issue as % of S/O: 50.0% (pre-Rights); 33.3% (post-Rights)
Shares Outstanding: 1,520.96mm (pre-Rights); 2,281.44mm (post-Rights)
Current Free Float: 72.4%
Dividend Entitlement: Rights shares will carry same entitlement
Lock-up: 90 days
Sales Restrictions: Reg S and 4(2) placement to QIBs in the US
Joint Underwritters: Citi, GS, JPM, MS, UBS

Timetable:
Dec 29 Ex-Rights Date
Dec 31 Books Closure Date (5:00pm)
Jan 06 Commence Rights Issue (subscription period)
Jan 14 Trading in Nil Paid Rights ceases
Jan 20 Close of Rights Issue (subscription period) and last day for acceptance and payment of Rights Shares
Feb 02 Listing and Trading of new Rights Shares (expected)
Feb 13 FY08 Earnings results announcement (expected)

 

[Ian6690]

Oh my god! Just checked my bank account and realised I have much less money than I thot. Got to deposit more money lest bank account become empty with my withdrawals for expenses. Where to get more money??? The situation is worse than I thot!

 

[silverfox@]

The 2 for 1 rights issue is not good news for the Banking industry.

For those who can well hold this, discounted price of $5.42 seems a good price, though it doesn't bode well for the industry signalling that a huge amount of fund is needed, but a lot of people are tempted by this price.

From 1 perspective is $5.42 but if you avg down 3 lots
Avg will be around $7.40 per lot. hmmmmm..... Diff with $8.39, About a $1, and the risk factor plus market situation, the $1 off for $3 may still be a risk. For those who can take this risk, then its ok.

At this market, point of uncertainty, plus Japan having meltdown right now, its still best to steer off these investments.