Luxembourg’s GEM Global Yield Fund invests in Nation Lanka Finance

[wmdcf]

Nation Lanka Finance PLC says that according to an agreement reached the Luxembourg registered company, GEM Global Yield Fund LLC SCS, with its registered office at 412F, Route d’Esch, L-2086 Luxembourg has remitted to the company via SIA, the first tranche of investment based on the formula agreed upon, amounting to Rs. 8,300,440 representing 1,211,743 ordinary shares at Rs. 6.85 each.

These shares under the first tranche will be listed with the Colombo Stock Exchange upon the necessary requirements.

This is the first tranche of investment made by GEM Global Yield Fund and further tranches of investments up to Rs. 700 million by way of private placements are expected in due course, says Nation Lanka Finance PLC.
http://www.adaderana.lk/bizenglish/luxembourgs-gem-global-yield-fund-invests-in-nation-lanka-finance/

[Afourer]

GEM is subscribing to private placements. So there will be new shares issued and this will dilute the current market price. Therefore, more shares issued to GEM the more the price goes down in the short term till the time the Company improves its business.

Anybody agree?

[chinwiTop contributor]

Rs. 8.3 million ?  

[Afourer]

Doesn't matter whether they will eventually get the money or not, but technically the price should go down rite?

[chinwiTop contributor]

Doesn't matter whether they will eventually get the money or not, but technically the price should go down rite?

It will depend on the amount a company get for a new share.

If they get more than the current asset value then it may retain or go up.

Actually CSF is trading at 6.50 while its asset value is just 30 cents. Hence, this is good and healthy for the company.

As far as I know they have 246 million shares (approx) . They are going to issue new shares to get 700 millio LKR @ 6.85. i.e. 102 million new shares.

I cannot understand the meaning of this 1st installment. 8.3/700 million ! = 1/84 .
To make any sense they have to get 84 times of amount they got in this tranche. Until then this is not effective by any means.

In other words they have issued just 1.2 million shares as the 1st tranche of the total of 102 million shares.

8.2 million LKR is not enough to buy a new car for the CEO.

[smallvilleTop contributor]

Why I'm thinking all this BS is just to get the share move up abt 2 rupees?