BFN - Orient Finance

[The Invisible]

Another speculative play is on.

What may be the positives for price appreciation.

Trading @ 16.90 now.

Sell off by JINS?

Or increasing the controlling stake by JINS?

[PANTOMATH]

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[nihal123Top contributor]

Thanks PANTO

[PANTOMATH]

Another dirty play,Time to time same rumor spread and price pushed up to dump on poor traders.
I see there are "BFN experts" in cyberspace.They put a chart and say target, if it fail put another chart and say another target.Once BFN down they vanish.Only come up to talk about BFN.I'm sure they have big quantities under their belt and stuck in big time,they are searching for pigs to bite the bullet.

BFN is not a good share to hold in fundamental aspect.If Janashakthi go for a deal in real world this can have price appreciation.I do not rule out the possibility,but don't get in to traps to lose your hard earned money.

[PANTOMATH]

Here we go,
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See the play,I said about
Still desperate BFN experts trying to push it up by putting targets.Beware guys!

[PANTOMATH]

Let's do the math for BFN,

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BFN has issued 1 preference share for existing 37 shares as at 20th January 2017 with 14% annual dividend for 5 years.

For easiness of calculation I'll take 3700 shares held at 20th January 2017

Closing price of 20th jan 2017                =12.9
Number of shares held                           =3700
Cost                                                     =3700*12.9       =47730
Number of P shares @ 1:37                    =100
Price for P share                                    =100
Cost for preference shares                      =100*100          =10000
New shares to be issued @6N:1P            =600
Cost for new N shares                            =600*19.59        =11754
Total cost for 3700N+100P+600N           =47730+10000+11754
                                                           =69484
No: of N shares held after conversion       =3700+600
                                                           =4300

As promised by the company P shares are eligible for 14% annual dividened,which was not given,as a compensation they will receive additional N shares  

Additional N For 100P                     =(3906978*100) / 4000496
                                                   =97.66
Total N shares after all                    =4300+97.66
                                                   =4397.66
Total cost                                       =69484
Cost for a N share                           =15.80

After all these things cost of N shares for the people who held BFN since 20th January 2017 is 15.80, which is close to market price.Existing N holders won't get anything other than getting their voting power diluted.
IMO there is no reason for BFN to have a big run for this announcement.

P shares have preference over N shares,Conversion of P shares to N shares will take the higher right of P holders and it will dilute with existing N shares.In longterm i see this is a good move for the company as they get fresh capital with diluting and equalizing ownership.

For a sell off to a third party presence of P might be a hindrance,Conversion to N may make it easier.This step might be the first step of selling JANA's stake to a third party in a future date.This is just a my assumption.Will keep an eye on BFN to see what's happening.

[yellow knifeTop contributor]

Hats Off Pantomath....

Now I can retire happily from the forum ( no , I am not doing it ATM) as your contribution to the forum is very much better than mine.

I was not so bold in exposing the hidden games.

Thanks Pantomath

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[sereneTop contributor]

Yap Superb Panto.

[Illusion]

Superb Pantomath. Plus from me.

Just need a clarification of your calculation for the education purpose. Preference share holders need to pay Rs. 19.59 to convert their share to N or it is just indicative price of the share?

[Ethical TraderTop contributor]

Superb analysis Panto. + from me.

[PANTOMATH]

Thank you all

Superb Pantomath. Plus from me.

Just need a clarification of your calculation for the education purpose. Preference share holders need to pay Rs. 19.59 to convert their share to N or it is just indicative price of the share?

Good question Illusion,Initially I also thought about it,But this phrase give the answer,

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Stated capital before the conversion is 1378Mn
Total N + Total P =1378Mn
If P is replaced by N without capital infusion stated capital should remain unchanged,

Later part of the paragraph say after the Private Placement stated capital go up to 1925Mn

Therefore conversion of P needs to add new capital to existing stated capital.

[sereneTop contributor]

Thank you all

Superb Pantomath. Plus from me.

Just need a clarification of your calculation for the education purpose. Preference share holders need to pay Rs. 19.59 to convert their share to N or it is just indicative price of the share?

Good question Illusion,Initially I also thought about it,But this phrase give the answer,

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Stated capital before the conversion is 1378Mn
Total N + Total P =1378Mn
If P is replaced by N without capital infusion stated capital should remain unchanged,

Later part of the paragraph say after the Private Placement stated capital go up to 1925Mn

Therefore conversion of P needs to add new capital to existing stated capital.

Same here.Only after the Pantas thread I scrutinised and found the changes in equity.
But still like know from expert what happens when Preference shares converted to Normal shares in accounting terms..I mean the Changes to Balance sheet in relation to Assets/ Equity /Liability.