MGT - Right Issue

Monster · 1 MGT - Right Issue Mon Feb 13, 2012 4:38 pm

Monster

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HAYLEYS MGT KNITTING MILLS PLC

2 new shares for each existing share @ 9/-. MGT traded around Rs 20/- today.

http://www.cse.lk/cmt/upload_cse_announcements/8021329130532_.pdf

MGT - Right Issue Mgt10

smallville · 2 Re: MGT - Right Issue Mon Feb 13, 2012 7:40 pm

smallville

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Have u checked the company?

Lately I was so skeptical on companies giving warrants.. finally the minorities were taken on rides by directors of these companies in the name of rights..

They dont seem to achieve anything with the money even.. If share is trading at 20, a right at 9 may look good but how this will taken by our crowd?

Monster · 3 Re: MGT - Right Issue Mon Feb 13, 2012 7:49 pm

Monster

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smallville wrote:Have u checked the company?

Lately I was so skeptical on companies giving warrants.. finally the minorities were taken on rides by directors of these companies in the name of rights..

They dont seem to achieve anything with the money even.. If share is trading at 20, a right at 9 may look good but how this will taken by our crowd?

They know the retailer's mentality. Instead of offering one for one right issue at 18/-, they offered 2 for 1 @9/-. Company incurred heavy loss in the recent past. Fundamentally it's not worth to invest. However, it might go to peak like LDEV after the right issue announcement. Did you notice, around 25,000 shares were traded at Rs 19.90 in the final moment.

greedy · 4 Re: MGT - Right Issue Mon Feb 13, 2012 8:05 pm

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Last 12 months this company making losses.

Loss for 9 months ended 31/12/2011 USD4,611,159
Loss for 9 Months ended 31/12/2010 USD4,993,974

Revenue is also dropping

Revenue for 9 months ended 31/12/2011 USD38,200,981
Revenue for Nine months ended 31/12/2010 USD46,124,449

The only positive thing is its book value per share seems OK. However, we may not know the status of their Property, Plant & equipment

Net assets as of 31/12/2011 USD11,199,805

LKR Equivalent 11,199,805*115 = LKR1,287,977,575

BV before rights issue = LKR1,287,977,575/50,781,106
================> LKR25.36

BV After the rights issue = (LKR25.36+LKR9*2)/3
==================> LKR14.45

CSE.SAS · 5 Re: MGT - Right Issue Mon Feb 13, 2012 8:18 pm

CSE.SAS

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greedy wrote:Last 12 months this company making losses.

Loss for 9 months ended 31/12/2011 USD4,611,159
Loss for 9 Months ended 31/12/2010 USD4,993,974

Revenue is also dropping

Revenue for 9 months ended 31/12/2011 USD38,200,981
Revenue for Nine months ended 31/12/2010 USD46,124,449

The only positive thing is its book value per share seems OK. However, we may not know the status of their Property, Plant & equipment

Net assets as of 31/12/2011 USD11,199,805

LKR Equivalent 11,199,805*115 = LKR1,287,977,575

BV before rights issue = LKR1,287,977,575/50,781,106
================> LKR25.36

BV After the rights issue = (LKR25.36+LKR9*2)/3
==================> LKR14.45

Good analysis greedy

mark · 6 Re: MGT - Right Issue Mon Feb 13, 2012 8:58 pm

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greedy wrote:Last 12 months this company making losses.

Loss for 9 months ended 31/12/2011 USD4,611,159
Loss for 9 Months ended 31/12/2010 USD4,993,974

Revenue is also dropping

Revenue for 9 months ended 31/12/2011 USD38,200,981
Revenue for Nine months ended 31/12/2010 USD46,124,449

The only positive thing is its book value per share seems OK. However, we may not know the status of their Property, Plant & equipment

Net assets as of 31/12/2011 USD11,199,805

LKR Equivalent 11,199,805*115 = LKR1,287,977,575

BV before rights issue = LKR1,287,977,575/50,781,106
================> LKR25.36

BV After the rights issue = (LKR25.36+LKR9*2)/3
==================> LKR14.45

thanks GREEDY,very worth..these days no one caring about FS...
btw as i know MGT is a scam company-my friend told me who working there

Monster · 7 Re: MGT - Right Issue Mon Feb 13, 2012 10:40 pm

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mark wrote:
thanks GREEDY,very worth..these days no one caring about FS...
btw as i know MGT is a scam company-my friend told me who working there

Thanks greedy for your analysis and thanks mark for your inside information.

As of latest financial statement HAYL & it's subsidies hold around 30 million shares, which means they have to invest around 540 million to subscribe the right issues (if they are intent to subscribe). Do you think HAYL will dump such amount if they don't have long term plan? They may have some plan to make this company in to profitable.

Note: I don't have single share of MGT and no idea to invest near future.

Kumar · 8 Hayleys MGT proposes Rs. 914mn Rights Issue Wed Feb 15, 2012 11:02 pm

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Hayleys MGT Knitting Mills PLC as announced plans to float a rights issue to raise Rs 914 million for expansion and to strengthen the company’s balance sheet, subject to Colombo Stock Exchange (CSE) and shareholder approval.

The Board of Directors of the company has proposed the issue of two new ordinary shares for every ordinary share held, at Rs 9 per share. The current stated capital of the company is Rs 527,856,000/- represented by 50,781,106 ordinary shares, a statement issued by the company said.

The announcement of the proposed rights issue came as Hayleys PLC, the major shareholder in Hayleys MGT Knitting Mills, reported record nine month net profits of Rs 3.6 billion, even after losses incurred by its textile operation, which is undergoing restructuring.

In a filing with the Colombo Stock Exchange, the Board of Directors of Hayleys MGT Knitting Mills said the proceeds of the proposed rights issue would be used to strengthen the company’s Balance Sheet, invest in equipment to manufacture higher value fabric, invest on energy saving initiatives and upgrade its Enterprise Resource Planning (ERP) System.

Hayleys MGT Knitting Mills produces up to 250,000Kgs of Single Jersey, Interlock, Fleece, Polar Fleece, Rib, Pique, Structures, Pointelles and Marl fabrics per week at its 33 acre plant at Narthupana Estate in Horana. The company is a leading weft knitted fabric supplier to top international brands such as Decathlon, M&S, George and Nike with an annual turnover in excess of $50 million.

Commenting on the proposed rights issue, Hayleys PLC Chairman Mohan Pandithage said: "This rights issue reflects our confidence in the future of the company, and the management’s determination to set the company back on the path to profits." He added: "We have in the recent past taken many initiatives including assignment of the best management resources available within Hayleys to focus on the turnaround efforts, reduction of manning levels, tightening of manufacturing and business processes so as to improve efficiencies and deliver on customer expectations. We are very confident of achieving a substantial improvement in the company’s outlook in the next financial year."

The Board of Directors of Hayleys MGT Knitting Mills PLC comprises of Messrs A. M. Pandithage (Chairman), S. Spezza, M. C. D Amalean, R. Seevaratnam, K. D. D. Perera, S. C. Ganegoda, J. A. G. Anandarajah, Dr. E. Fernando, H. Somashantha and N. Somaratne.
Island 16-02-2012
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=45363

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MGT Knitting Mills PLC is planning to raise Rs. 914 million via a rights issue to strengthen its balance sheet and to improve facilities in its factory. Accordingly, the firm has decided to issue 101,562,212 million shares with two new ordinary shares for every one existing ordinary share held by its shareholders