Oxley Holdings

I expect the dividends to keep rising, as more projects go TOP.

Oxley is going to do a share split  whereby 10 shares becomes 18 shares.

Taking 39 cents as stock price, it means the stock price after split is theoretically 21.66 cents.

After the share split excercise comes the rights issue.

Shareholders get 1 rights share for every 10 shares of Oxley.

They pay 17 cents to Oxley to convert the rights share into an ordinary share.  So, this is a sort of discounted stock sale to Oxley shareholders in order for the company to raise funds to repay  loans extended by Ching and Low (the bosses of Oxley).

If you know the shareholding of Oxley, you would have a clearer picture. Ching, Low & Tee have loans to the company totalling 36.5 million, which will be repaid by funds raised from the rights issue.

The v interesting thing is that Ching, Low & Tee in aggregate own 82.65% of Oxley. This means Ching, Low & Tee will come up with a huge amount of money to pay the company which will then pay the trio. Out of left pocket, into right pocket.

There is some surplus for working capital, of course but it is not the key reason for the rights issue.

I see the right issue very much have to do with getting money for the company to pay back to the directors rather than raising capital for the company as bulk of the money are to be used to pay back director loan. Is this really a good move, i don't know.... On the director point of view...i think it is right for them to recover their loan to the company. On the shareholder point of view, i am a little disappointed as the whole exercise seem more like to be for director to recover their loan.

erelation: This is not your usual case of fund raising.
In this case, the three guys Ching -- Low -- Tee are the ones coming up with the most money for the rights issue. Then the company will pay them with the same money. It's largely a one-round trip that starts and ends with them.

The shareholder loans is small compared to the bank borrowings, which is the bigger headache. Oxley has bank borrowings of nearly S$1 billion in short-term and long-term borrowings.

It's rather extreme, you had better hope it doesn't get knocked over by any financial event.