From reports there will be HK$79,500,000 invested today and will be transferred in 5 days.
The China Stock Market have agreed the move and it will create 636,000,000 shares.
Copied and pasted. Ja606 refused the link.
Quamnet
Birmingham (02309) to place $79.5M CNs to Inkatha 09:25 Infocast (Infocast News) On 2 August 2011, Birmingham International (02309) agreed to place convertible notes in the principal amount of up to HK$79.5 million to Inkatha Group Limited. The estimated net proceeds of HK$76.5 million will be used as general working capital.
The conversion price of the 5% p.a. convertible notes is HK$0.125 per share, representing a discount of 18.83% to the closing price of HK$0.154 per share prior to Birmingham's suspension of trading on June 30. Assuming full conversion of the convertible notes, Birmingham will issue 636 million shares, representing 14.06% of its enlarged issued share capital.
Kingston Securities Limited is the placing agent.
Don't know what to make of this.
KRO
New Investment
posted on 3/8/11
There must be a number of ways to interpret this. Here are two that spring to mind:
Optimistic: Making the shares available (does it mean 14% of total shares - I'm not sure) could mean that an additional investor is out there, prepared to invest £6m (a drop in the ocean, I'd have thought). but perhaps the investor will increase his/her holdings in the near future?
Pessimistic.
No investor has come forward and the share issue may fail as previous BIH issues have.
Got to say that issuing shares for 'working capital' (i.e. cash used for day to day payments) seems to be a strange move. I thought we were in the black with HSBC, so couldn't we just increase our overdraft or re-negotiate loan repayment terms?
kro
posted on 3/8/11
http://www.hkexnews.hk/listedco/listconews/sehk/20110803/LTN20110803003.pdf
This is a downloadable PDF.
There will be some investment but from what I can make out BIH are transferring the money to Inkatha Group Ltd who are based on 'British Virgin Islands'
They have no link to BIH employees. This will allow BIH to float on the stock market and generate cash through shares. All 636 million of them.
Any experts who could put a laymans side to this?
KRO
posted on 3/8/11
Only 1p a share , jump in lads ,
im having 100. kro.
posted on 3/8/11
"Any experts who could put a laymans side to this?"
Haven't read the article but from your description it sounds like they're transferring ownership of the holding company to another offshore entity,based in the BVI.
It's like selling BCFC to someone else but that someone else could well be you,or not as the case may be.
It's common practice for houses(big ones!),luxury yachts,private jets etc.It's normally used to circumvent capital gains or some other government tax.
For example,I own a large house but when I bought it I wanted to be able to sell it without having to pay,for example,the UK Govt huge amounts of stamp duty.
What I do is set up an offshore company and buy the house using the new company.Then,when I want to sell the house I just transfer ownership of the offshore company to the new owner and bingo,no house sale,no estate agents or greedy taxman grabbing my cash.
Just the offshore company having a new owner, the same company which happens to own the house!
BTW,this loophole was closed in the UK a long time ago,I just haven't lived there for many,many years!
There are I believe big annual taxes to pay on houses owned by offshore companies now,so don't try this at home kids!