Price on September 14, 2004
Berjaya Group: RM 0.12
Berjaya Land: RM 0.815
My first stock pick for 2004 is Berjaya Land. Berjaya Group currently is undergoing a group restructuring that involve capital re-payment on the loan owed to Berjaya Land. Berjaya Group will be restructured into a new company "newco" and it will involved a 5 into 1 share reduction exercise. It means at a current price of RM 0.12, the newco share should be worth around RM 0.60 per share. As part of the capital repayment to Berjaya Land, newco will issue 4 ICULS at Par Value of RM 0.50 which can be converted into 2 newco shares.
As a summary, for every 1 Berjaya Land RM0.815 share held, you be entitled to 2 newco shared value at approximately RM1.20. <-That is the beauty of it.
If Berjaya Land remained unchanged after the capital or loan repayment, you will gained a whopping 120% based on the conservative prediction.
According to the filling to KLSE, Tan Sri Vincent Tan hold more than 65% through direct and indirect holding in Berjaya Land. It means that most of the $$ is coming out from the left and into the right pocket. This is the opportunity to make some of the $$.
By Edmund Tan
September 14, 2004