Friday, February 24, 2006

Mieco: Part IV

Saw this newsclip involving Mieco

  • Bandar Raya Developments Bhd (BRDB) has withdrawn its resolutions for the proposed de-merger of Mieco Chipboard Bhd from the group after realising that the proposal would not get the required support from shareholders, said its chairman Datuk Mohamed Moiz. ( Read more here: BRDB withdraws de-merger proposal )

This means that the distribution of up to 119.09 million Mieco shares to BRDB shareholders on the basis of one Mieco share for every four existing shares held in BRDB is withdrawn.

This issue was mentioned in this earlier posting: Mieco: Part II and here is a snippet from it.

Oh... here's another important issue to consider.

remember Bandar Raya's plan to distribute Mieco shares?

now just for info ... this deal is still pending... now assuming it goes thru...

let's work out some implications..Mieco has 210 million shares total.

Out of this portion... Bandaraya plans to distribute 119.1 million to its shareholders. (wah that's some 56% wor!)

Now.... key issue for them minority Mieco shareholders is... what will these Bandaraya shareholders do after receiving these shares?

Will they keep? or will they sell?

Reason to keep? Err... err.... Mieco too cheap to sell? Hold for long term mah!

Reason to sell? Hoi.. Mieco losing moola mah. so Mooooola in me pocket better than paper money which might diminish if Mieco's performance does not improve soon!

So them Bandar Raya boys have decided to cancel this proposal. Which really kind of makes sense cause if I am a shareholder of Bandaraya and I am given free share of a company whose earnings is declining so bad, I would have sold those free shares ASAP!

And if I am a Bandaraya shareholder, I would really wonder how could the management come out with such corporate exercises. Why couldn't they just focus on the core business activities?


Ahh.. from Business Times: ( click here: Plan to demerge Mieco rejected )

  • SHAREHOLDERS of property developer Bandar Raya Developments Bhd (BRDB) have rejected the company's plan to split its particleboard subsidiary from the group, citing unsuitable timing for the move.
    BRDB chairman Datuk Mohamed Moiz said the group has withdrawn the proposal to demerge Mieco Chipboard Bhd, a move intended to allow the company to focus on its core business."Shareholders felt that the timing was wrong considering the share price is not doing well.


The share price is not doing well!

Speaks volume for the quality of Mieco Chipboard as a share, isn't it?

Reminds me of one of my Granny's repeated saying (excuse the English here), "If give people, people also dowan, like this type stuff means no good stuff!"