Photo: Oceanus
OCEANUS shareholders may now convert their shares to Taiwan Depository Receipts (TDRs), which are currently trading at a premium to the Singapore-listed shares.
Oceanus TDRs closed at NTD13.3 or approx. S$0.58, a premium of about 53% over its shares which closed at S$0.38 last Friday.
Since the TDRs started trading on the Taiwan Stock Exchange on 31 December last year, this premium has been hovering between 50% to 90% on average. As TDRs and shares are not fungible, the arbitrage opportunity from the trading premium of TDR could not be realized.
Oceanus’ recently-announced Second TDR Programme provides an opportunity to holders of Oceanus’ shares to convert their shares to TDRs and benefit from the premium.
Shareholders can apply for this Second TDR Programme from today (Apr 26) until 14 May (updated).
Participants of this Second TDR Programme are to transfer the shares that they apply for conversion to UOB Kay Hian, the administrator of this exercise (The form is available by clicking on the link provided at the bottom of this page).
Based on the indicative timetable, there is a period between the time the application opens to the listing of the TDRs and the completion of the sale of TDRs.
During this period, participants are not allowed to trade with their participating shares. Judging from the huge premium of Oceanus’ TDR price over share price, participation is likely to be keen. However, if the total participating shares exceed the programme size of 150 million shares, a pro rata basis applies.
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In that case, participants will unlikely to be able to convert all their shares and might thus end up with odd lots after the allocation.
The programme size of 150 million shares is but just 8.7% of the 1.73 billion shares belonging to those that are eligible for this exercise, i.e. shareholders who have registered addresses in Singapore.
Further, holders of the outstanding estimated 383 million warrants are also eligible to participate by converting their warrants to shares and then apply for conversion to TDRs.
Supposing all eligible share and warrant holders apply, the allocation rate could work out to be just about 7%.
(May 6 update: Full details of the Second TDR Programme have been provided in announcements from Oceanus to the SGX. The application period has been extended by a week.)
