Articles: Public float
Arcelormittal v China Oriental (0581) & others
HK Court of First Instance, 14-Sep-2018
The court rejects an application for discovery on the Jan-2017 placing of new shares which restored the public float and allowed the suspension to be lifted. China Oriental refuses to disclose the identity of the placees. Our take: the public float could have been restored without a placing, by issuing bonus shares with an alternative of non-voting convertible shares and having the two controllers elect to receive those, thereby reducing their voting weight and restoring the float. Several other companies have done so, including Sunevision (1686).
HK Court of First Instance, 14-Sep-2018
The court rejects an application for discovery on the Jan-2017 placing of new shares which restored the public float and allowed the suspension to be lifted. China Oriental refuses to disclose the identity of the placees. Our take: the public float could have been restored without a placing, by issuing bonus shares with an alternative of non-voting convertible shares and having the two controllers elect to receive those, thereby reducing their voting weight and restoring the float. Several other companies have done so, including Sunevision (1686).
SEHK may delist China Oriental (0581) in 6 months
SEHK, 27-Jul-2016
This threat can only hurt the public shareholders who own 7.9% and have had their investment frozen since 29-Apr-2014 on the grounds that the float is too small. At the suspended price, the public float is worth HK$269m, larger than in many other listed companies. Ironically, SEHK blames the company for "depriving shareholders of trading their shares". Look in the mirror, SEHK, it's your rule. Scrap it.
SEHK, 27-Jul-2016
This threat can only hurt the public shareholders who own 7.9% and have had their investment frozen since 29-Apr-2014 on the grounds that the float is too small. At the suspended price, the public float is worth HK$269m, larger than in many other listed companies. Ironically, SEHK blames the company for "depriving shareholders of trading their shares". Look in the mirror, SEHK, it's your rule. Scrap it.
Takeovers Panel upholds Executive decision: no MGO for China Oriental (0581)
SFC, 19-Oct-2015
The stock has been suspended since 29-Apr-2014 due to a deadlock over the public float rule.
SFC, 19-Oct-2015
The stock has been suspended since 29-Apr-2014 due to a deadlock over the public float rule.
Takeovers Panel rules no mandatory general offer for China Oriental (0581)
SFC, 15-Oct-2014
The stock has been suspended since 29-Apr-2014 due to a deadlock over the public float rule.
SFC, 15-Oct-2014
The stock has been suspended since 29-Apr-2014 due to a deadlock over the public float rule.
Scrap the public float rule
Investors in SCMP (0583) are in the deep freeze again, and other companies have indulged in artificial schemes to comply with the 25% public float rule. The rule should be scrapped, because as we explain, it has no real purpose, and because the only way to enforce it is to victimize minority shareholders by suspending their shares. The rule does not serve investor interests. (11-Jun-2013)
Investors in SCMP (0583) are in the deep freeze again, and other companies have indulged in artificial schemes to comply with the 25% public float rule. The rule should be scrapped, because as we explain, it has no real purpose, and because the only way to enforce it is to victimize minority shareholders by suspending their shares. The rule does not serve investor interests. (11-Jun-2013)
SCMP controller "sells" 14.4% to 3 banks, but grants put and gets call option at same price
Company announcement, 2-Mar-2009
Comment: after a year of stock suspension, SCMP's controller, Kerry group, has "sold" 14.4% to 3 banks, cutting its stake to 74.9%. But each bank has a 4-year put option to sell the shares back to Kerry, and Kerry has the option to trigger the put option, making it a call option too, all at the same price, adjusted for divdends plus a 1.1% p.a. fee. The banks keep the "sale" proceeds as collateral. This smoke-and-mirrors really does nothing to increase the float. The free-float rule is clearly obsolete and should just be scrapped. Investors have been deprived of trading opportunity for a year, for this?
Company announcement, 2-Mar-2009
Comment: after a year of stock suspension, SCMP's controller, Kerry group, has "sold" 14.4% to 3 banks, cutting its stake to 74.9%. But each bank has a 4-year put option to sell the shares back to Kerry, and Kerry has the option to trigger the put option, making it a call option too, all at the same price, adjusted for divdends plus a 1.1% p.a. fee. The banks keep the "sale" proceeds as collateral. This smoke-and-mirrors really does nothing to increase the float. The free-float rule is clearly obsolete and should just be scrapped. Investors have been deprived of trading opportunity for a year, for this?
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