capital restructure by muller and phipps

winwin · 1 capital restructure by muller and phipps Sun Feb 06, 2011 4:59 pm

winwin

Stock Trader

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recently muller and phipps made an announcement by their managing company EB Cresy that there is going o be a capital restucture.that is a capital reduction from LKR 316m to LKR83m for bettering their balance sheet and paving the way for finance and loan facility.and better company future.but they say the issued shares remains same

they are all lankem group of companies. good Directors

Hi Expert, how can a capital reduction affect/benefit an existing share holder?

will Muller and phipps share price be another citrus(reef) after the restructure of capital?

pls share your views.thanks

Chinwi · 2 MULL Sun Feb 06, 2011 10:06 pm

Chinwi

Associate Director - Equity Analytics

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I reproduce what we discussed about 10 days ago.
It may help you.
----------------------------------------------
monster wrote-
@chinwi, I didn't follow MULL. Do you think it will have future growth?

@monster,

MULL turned around last qtrs to become positive with tiny 5-10 cents EPS. It had big carried forward losses.

3-4 weeks ago they restructured it erasing losses by reducing capital. Before that they had a rights issue to pay loans thus no more threat of big interest costs. Then CWM bought majority shares.

Although its same NAPS before and after restructuring, the signal is that they are doing groundwork to make it a better company.

If they increase a bit in revenue they can easily reach 50 cents EPS mark first. I feel this is a good time to get this low priced share.

I collected it 1.30, 1.80, 2.00, 2.30 & 2.50. Today 20,000 @ 2.60.

I feel they will continue to do whatever necessary make it a performing entity during this year, with the backing of the parent company. Hence expecting 50% return in one year is fair I think. I use 13% margin loan for this.

I wanted to try more shares 2 weeks ago below Rs 2, but it started showing some momentum, that means some others also watching it. I hope to get more if it fall to 2.20 next week.

With this kind of companies they can do miracles if they work smartly .
It is easy to increase the EPS from 10 cents to 1 Rupee than from 10 rupees to 100. MULL is one of my bets for 2011/12.

---end ---
@winwin,
This was posted few days ago. Although I talk about getting 50% return in one year, it has already gone up more than that. Now, I readjust my 'hope' to get another 50% return from 1 year , and plan to collect some more between 3.00 - 3.70 gradually. I go for long term only.

RichDad · 3 Re: capital restructure by muller and phipps Sat Sep 17, 2011 9:15 am

RichDad

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Thanks Chinwi, Super analysis!

I am a believer of MULL too in the long run.

ABEST · 4 Re: capital restructure by muller and phipps Sat Sep 17, 2011 9:27 am

ABEST

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it is suitable for long term(more than one year)

Chinwi · 5 Re: capital restructure by muller and phipps Sat Sep 17, 2011 2:20 pm

Chinwi

Associate Director - Equity Analytics

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Thanks Richdad.

Readers please note my above post on MULL was made few months ago ( by Chinwi on Sun Feb 06, 2011 ) and it got a new life in the forum because Richdad found it and made a comment today. Cool

I have no updated news for you on this share. But, still believe they can make this a nice company if they work smartly. I do not know how far they have gone at the moment. If any one can enlighten us - appreciated !.

Note: I did not sell.