The article suggested the following.
- Tamco Corporate Holdings Bhd is mulling a plan to dispose of its core switchgear manufacturing operations to a foreign investor. The deal, if closed, would land it a neat cash pile that could potentially be distributed to shareholders.
Sources reveal that Tamco may get as much as RM388 million in cash if the deal goes through.
On a per share basis, if all the cash is distributed, Tamco's shareholders could get up to RM1.50 per share. However, the disposal will leave Tamco without a core business, which means it will have to acquire a new one.
The sources strikes once more!
Now get this, if the reader of this financial news article had no idea how to surf the Bursa Website, how would the reader knows the story is misleading?
This is what Tamco said in its announcement on Bursa.
- We refer to the Exchange's letter dated 25 June 2007 (Ref NM-070625-53228) on its query on the article concerning Tamco which appeared in The Edge, page 21, on Monday 25 June 2007.
We wish to reply as follows:
1. As announced by the Company on 9 May 2007, Tamco has appointed Credit Suisse (Singapore) Pte Ltd and ECM Libra Avenue Securities Sdn Bhd as the Company's advisors to look for prospective strategic partner(s)/investor(s) for the core medium voltage switchgear business of the Company. The Board wishes to inform the Exchange that the process is still on-going and the Board has not received any definitive proposal from potential partner(s)/investor(s). As such, the Board is unaware of how a sale figure of RM388 million (as mentioned in the article) is derived. For the same reason, the Board is also unable to comment on whether a cash distribution of RM1.50 per share will be undertaken.
The Board will make the necessary announcement in due course should the occasion arise in accordance with the provisions of the Bursa Malaysia Securities Berhad Listing Requirements.
2. The Board wishes to inform the Exchange that the Group's accounts for the financial year ended 31 May 2007 are currently being prepared. As such, it is unable to comment on whether the revenue for the Group for the full financial year ended 31 May 2007 will come in at RM445 million as mentioned in the article.
Ahem!
Would you call the financial news as misleading?
Now consider that cash distribution of RM1.50 per share thingee.
Tamco was a share trading around 0.90 sen!
So when the financial news suggests such a massive cash distribution, surely this would have been one heck of a sexy story!
Well have a look at the current stock trading data for Tamco.
Do note how the stock jumped to life a day before the publication was published and note how the stock gained handsomely the day of the publication!
No comments:
Post a Comment