By now I guess most of you have seen the following news release. Basically, the parent corporation, SembCorp is reducing their ownership from 75% to 42.37% in order to raise money for expansion. THIS IS NOT SOME FAT CAT INVESTORS BAILING OUT. This is the parent company raising money for expansion, which they can do by issuing debt or giving up control by divesting majority ownership. As best I can tell, the shares outstanding before this divestiture were 12.24 million, after there will be 12.64.
Putting a positive spin on this, the enlarged "float" will allow more institutional investments and, probably, a sizable investment by a U.S. ISP looking for a foothold in Asia.
I see any temporary dip as a buying opportunity. The crazy way the stock has been trading lately, it could go up on this news. Who knows?
<<WASHINGTON (Dow Jones)--Pacific Internet Ltd. filed to offer 2.13 million common shares.
In a filing Thursday with the Securities and Exchange Commission, the company said 1.91 million shares are being offered by shareholders, including Sembawang Ventures Pte Ltd. and SIM Ventures Pte Ltd.
Following the offering Sembawang will have a 42.37% stake representing about 5.36 million shares. SIM Ventures will have a 14.13% stake representing roughly 1.79 million shares of the company's common shares.
Proceeds from the offering will be used to finance potential acquisitions in existing and new markets in the Asia-Pacific region, fund capital expenditures and for general purposes, including working capital.
Lehman Brothers, Bear, Stearns & Co., Inc. and SG Cowen will underwrite the offering.>>
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