Rykadan Capital Limited (stock code: 2288) will be holding Extraordinary General Meeting (“EGM”) on 23 November 2020 (Monday) at Room 1, 10/F, United Centre, 95 Queensway, Admiralty, Hong Kong at 1:00 p.m. for approving the Proposed Share Buy-back announced earlier in September. According to the Proposed Share Buy-back, Rykadan Capital, through Dongxing Securities (Hong Kong) Company Limited, will make a conditional cash offer to the shareholders of the Company to buy back up to 102,000,000 shares of the Company at a premium offer price of HK$0.68 per share.
Premium valuation: The Proposed Share Buy-back provides an opportunity for the shareholders to sell their shares at a premium to the prevailing market prices of the shares of the Company and receive cash proceeds in return. In particular, the closing price of the Shares has not exceeded the offer price for almost twelve months after 27 September 2019.
Certain and immediate value: The shares had been trading on the Hong Kong Stock Exchange at an average daily trading volume of approximately 71,397 Shares for the six months up to and including the last trading day (i.e. 15 September 2020), representing less than 0.02% of the total issued shares as at the last trading day. Hence, the Proposed Share Buy-back presents an immediate opportunity for the Company’s shareholders to dispose of their Shares, not constrained by trading liquidity, and exit their investment for cash proceeds.
Monetise at a lower discount to the Company’s NAV: In addition, Innovax Capital Limited, being the independent financial adviser (IFA) of the exercise, mentioned that the shares have consistently been traded at a substantial discount to the net asset value (NAV) per share attributable to equity shareholders of the Company, and the IFA considers that the Proposed Share Buy-back provides an opportunity for the shareholders to monetise their shareholdings at a lower discount to the Company’s NAV per share attributable to equity shareholders of the Company.
In all, as an intrinsic merit of the exercise, the Proposed Share Buy-back confers the shareholders the flexibility and equal opportunity to participate in the Offer on the same terms at their own absolute discretion. The Proposed Share Buy-back required independent shareholders’ approval at the EGM on 23 November 2020 (Monday). Qualified shareholders of Rykadan Capital should seize this opportunity to cast their votes by actively participating in the EGM in order to express their views. For CCASS participants, they’re encouraged to express their votes intension to Share Registrar (i.e. Tricor) through their respective brokers on or before 4:30pm on November 17 (Tuesday).