SINARMAS LAND's share price rose as high as 9.8%, or 4.5 cents, today after Business Times reported that the company planned to unlock shareholder value by injecting its Indonesian properties into a REIT for listing in Singapore or Jakarta.

The share price (closing price: 49.5 cents, or 3.5 cents up) gain did not benefit a certain group of shareholders. They held Sinarmas Land warrants and, for some reason, failed to exercise them by the expiry date of 18 Nov 2015.

Last Friday, the company said 13,618,985 warrants had just lapsed, which represents a large loss for the holders.

Instead of letting the warrants lapse, the holders could have sold the warrants at the trading range of 35-40 cents each in the one month or so before expiry. (
see price chart at Shareinvestor.com)

If they had, they would have raked in $5.1 million in aggregate (ie 13.62 m warrants x 37.5 cents assumed average).

OK, maybe the market liquidity 
wasn't there to absorb the warrants.


Then the alternative for the holders would have been to exercise the warrants at 10 cents apiece, and then sell the mother share.

If they had done that, they could have taken home about $5.3 million (ie, assuming a sale price of 49 cents and deducting the 10 cents conversion price to get net 39 cents).

The 13.6 million warrants which didn't get exercised was, percentage-wise, small compared to the 1.5 billion that were exercised -- but isn't it awful, financially, that some investors just let $5.1-$5.3 million of their money go down the drain?


Indon properties to be listed as REIT

robinng sinarmas4.14Robin Ng, executive director, Sinarmas Land. NextInsight file photo."
The unlocking of recurring income assets into a Reit is something which we will definitely look into in the next 12 to 18 months," executive director Robin Ng told The Business Times.

"Whether it is going to happen in Indonesia and Singapore, we do have the vision to make it happen. However, we are unable to commit to a certain timeframe as this will be largely driven by market conditions."

About S$70 million of Sinarmas Land's annual revenue is derived from recurring income-generating properties in Indonesia. Some of these office and retail properties will be injected into the Reit while some others could be granted under an option for the Reit to acquire in the future, according to Mr Ng.

(Source: Business Times 23 Nov 2015)


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  • Lionel Lim