Certain and Immediate Cash Returns to Shareholders
Rykadan Capital Limited (“Rykadan Capital” or the “Company”, together with its subsidiaries the “Group”; stock code: 2288) just announced that Dongxing Securities (Hong Kong) Company Limited will make a conditional cash offer (the “Offer”) on behalf of it to the Shareholders to buy back up to 102,000,000 of the Company’s issued shares (the “Shares”) at an Offer Price of HK$0.68 per share (the “Offer Price”). Upon completion, all Shareholders are expected to benefit from the increase in consolidated net asset value per Share. Following the closing of the Offer, the Group intends to maintain its listing on The Stock Exchange of Hong Kong Limited (“SEHK”).
The 102,000,000 Shares proposed in the stock buy-back represents approximately 21.36% of the Shares in issue as at the date of the Announcement. The Offer Price of HK$0.68 per Share represents a premium of 51.11% over the closing price of HK$0.45 as quoted on SEHK on 15 September 2020 (the “Last Trading Day”), or a premium of approximately 55.55% over the average closing price of the Shares during the last 30 consecutive trading days immediately prior to and including the Last Trading Day. The aggregate cash consideration payable under the Offer (if the maximum number of Shares are bought back) will amount to approximately HK$69,360,000.
The price of the Shares has historically been traded at a significant discount to the Group’s net asset value attributable to owners of the Company per Share. Taking the closing price of the Shares of HK$0.45 on the Last Trading Day as a reference, the discount to the Group’s net asset value attributable to owners of the Company of approximately HK$2.77 per Share as at 31 March 2020 was as high as approximately 83.77%.
Premium valuation: The Offer provides an opportunity for the Shareholders to sell their Shares at a premium to the prevailing market prices of the Shares and receive cash proceeds in return. In particular, the closing price of the Shares has never exceeded the Offer Price after 27 September 2019 for almost 12 months. The Offer Price represents a premium of approximately 55.55% over the average closing price during the last 30 trading days immediately prior to and including the Last Trading Day.
Certain and immediate value: The Shares have been traded on the SEHK at an average daily trading volume of approximately 71,397 Shares for the six months up to and including the Last Trading Day, representing less than 0.02% of the total issued Shares as at the Last Trading Day. The Offer presents an immediate opportunity for the Shareholders to dispose of their Shares, not be constrained by trading liquidity, and exit their investment for cash proceeds.
Mr William Chan, Chairman and Chief Executive Officer of Rykadan Capital, said, “Over the past years, the shares of the Company have been trading at a steep discount to its consolidated net asset value. By repurchasing such maximum number of Shares from the market, the Offer will enable our Shareholders to immediately realise cash returns.”
About Rykadan Capital Limited (Stock code: 2288)
Rykadan Capital Limited is a Hong Kong-based investment holding company. The Group operates and invests in real estate development, real estate investment, distribution of building materials and asset, investment and fund management. For more information, please visit www.rykadan.com.
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