Eratat Lifestyle

For those who didn't have the circular for shareholders during the AGM,

if u read pg 12, section 2.7.1, 2.7.2 and 2.7.3

it says that the company can do sharebuyback up to 47,491,251 shares.

Quoting the letter:

In the case of Off-Market Purchases by the company and assuming that the Company purchases or acquires the maximum 10% Shares at the Maximum Price of S$0.1496 for one Share (being the price equivalent to 10% above the Average Closing Price of the Shares for the five consecutive Market Days n which the Shares were traded on SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of 47,491,251 Shares is about S$7.1 million (or RMB 35.7 million)

- I do not know how many shares Eratat gonna buy but I suspect Eratat may have already started the off-market purchases. Notice their max price is S$0.1496 and for the past few days, the price range is stable around 14.9-15c? But u can estimate when the sharebuyback will be over by looking at the average daily volume. There is no shortage of buyers at 14.9 cents. similarly, sellers getting lesser. 14.8 cents seem like a strong support. anyway, after sharebuyback, with lesser supply of public floating shares, demand of shares will go up and cheonging to 16 cents n beyond shld be a breeze.

Note: This is pure guessing. I could be wrong on this.

newbiestock,

I don't think Eratat will start the share buy-back till they raise the fund from the bond issue, as they need the cash for their biz growth and to have an impact on share price, they need sizable fund to buy in large qty.

I see bond/warrant issue to Sun Hung Kai could be a super smart move of the mgt to solve the depressed share price at minimal cost to Eratat thru:

1) Eratat buys back 82m shares over 2 yrs and issue those treasury shares to Sun Hung Kai through warrant conversion. The exercise shifts the share from weak retail investors to a strong well known corporate investor, without any share dilution as compared against a share placement approach (which is also inferior due to current depressed share price)

2) Assuming warrant conversion price is 30cts (using the same rate based on past warrant expired in Jan 13) and Eratat managed to buy back 82m shares at avg price of 20cts and drive the share price up, it will gain $8.2m from this exercise, which can be used to cover the interest for the bond.

3) I also expect a dual listing in HK stock exchange is likely since SHK helps companies to list there.

Let's wait for the announcement.

could be... many possibilities.

just hv to wait n see..

but for this yr, max they can only buy up to 47 mil shares.

see how. haha.

Exactly! Lets wait for the formal announcement to be released.

ya.. after some thinking, gangho, u could be rite that the sharebuyback has not started. Hv to wait for the bond issue thing to settle first before can utilise the funds for buyback.

Eratat just have their autumn-winter trade event 2013 on May 8th. Below shows the chinese report.

www.jl.chinanews.com/news1-69132.html

It is also the same event coverage by SIAS.

Julian So, managing director of client from SHK Client solutions from SHK was also present on 8th May 2013 in the autumn-winter trade event. I believe the final negotiations would have more or less discussed around th trade show period. Now is probably waiting for the contract details to be out. if lucky, maybe we see some news on this Friday (it will be exactly 2 wks from the bond issue announcement on 3th May)

gangho wrote: newbiestock,

I don't think Eratat will start the share buy-back till they raise the fund from the bond issue, as they need the cash for their biz growth and to have an impact on share price, they need sizable fund to buy in large qty.

I see bond/warrant issue to Sun Hung Kai could be a super smart move of the mgt to solve the depressed share price at minimal cost to Eratat thru:

1) Eratat buys back 82m shares over 2 yrs and issue those treasury shares to Sun Hung Kai through warrant conversion. The exercise shifts the share from weak retail investors to a strong well known corporate investor, without any share dilution as compared against a share placement approach (which is also inferior due to current depressed share price)

2) Assuming warrant conversion price is 30cts (using the same rate based on past warrant expired in Jan 13) and Eratat managed to buy back 82m shares at avg price of 20cts and drive the share price up, it will gain $8.2m from this exercise, which can be used to cover the interest for the bond.

3) I also expect a dual listing in HK stock exchange is likely since SHK helps companies to list there.

Let's wait for the announcement.

The push from 14.7c back to 14.9 c this morning sort of relieves me.

first, it shows the party's not over yet.

secondly, there's a lot of collection at 14.9 c and it seems like the collection haven't over yet. Why at 14.9c, i dunno.

third, the barrier at 15c seems to be done quite intentionally.

let's watch n see over next few days...