redtone international berhad - Announcements - Bursa Malaysia

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2.1 Public Shareholdings Spread On the LPD, the public shareholding spread was 48.23% held by 4,747 public shareholders. The public shareholdings spread after the Proposed Share Buy-Back is expected to be reduced to 42.48% assuming that the Proposed Share Buy-Back is implemented in full. The Board is mindful of the requirement that any purchase of the REDtone Shares by the Company must not result in the public shareholding spread of REDtone failing below twentyfive percent (25%) of its issued and paid up share capital. 2.2 Implications of the <strong>Malaysia</strong>n Code on Take-overs and Merger 1998 As at the LPD and based on the Company’s Register of Substantial Shareholders, the provisions on mandatory takeovers under the <strong>Malaysia</strong>n Code on Take-over and Mergers 1998 will not be triggered by any shareholder of REDtone solely by reason of the Proposed Share Buy-Back being carried out in full. 2.3 Potential Advantages and Disadvantages of the Proposed Share Buy-Back The Proposed Share Buy-Back will provide our Company with the opportunity to take preemptive measures if need be, to stabilise the supply and demand of REDtone Shares in the open market, thereby allowing the price of REDtone Shares to better reflect its fundamental value. The maintenance of the share price is important in order to maintain investors’ confidence to facilitate REDtone’s future fund raising exercise via issues of equity shares, should there be any such exercises in future. In addition, the Proposed Share Buy-Back will also provide an opportunity for the Company to make a gain when it resells the purchased REDtone Shares for cash when market conditions improve. The Proposed Share Buy-Back, if implemented, would reduce the financial resources of the Group, which may result in the Company having to forgo other feasible investment opportunities that may emerge in the future or, at the least, deprive the Company and the Group of the interest income that can be derived from the funds utilised for the Proposed Share Buy-Back. The Proposed Share Buy-Back would also reduce the amount of resources available for distribution in the form of dividends to the shareholders of REDtone. However, the Board will only exercise the purchase of REDtone Shares after in-depth consideration of the Company’s financial resources and also the resultant impact on its shareholders. The Board will be mindful of the interests of the Company, the Group and the shareholders in implementing the Proposed Share Buy-Back. 2.4 Purchase and resale made in the preceding 12 months The Company has not made any purchase or resale or cancellation of our own shares in the preceding 12 months, and do not currently hold any treasury shares. 3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back is likely to potentially benefit the Company and its shareholders in the following manner: (i) the Company may be able to stabilise the supply and demand of the REDtone Shares in the open market and thereby support its fundamental value; (ii) if the REDtone Shares bought back by the Company are cancelled, shareholders may enjoy an increase in the value of their investment in the Company due to the increase in earnings per share as a result of the reduction in the issued and paid-up share capital of the Company as described in Section 4.1 below; and 14
(iii) the Board would have an opportunity to distribute any REDtone Shares held as treasury shares as share dividends to reward the shareholders of the Company and/or resell the treasury shares at a higher price, thereby making an exceptional gain for the Company. 4. EFFECTS OF THE PROPOSED SHARE BUY-BACK The financial effects of the Proposed Share Buy-Back on the share capital, net assets, working capital, earnings, dividend and shareholding are as follows: 4.1 Share Capital On the assumption that the Proposed Share Buy-Back is carried out in full and all the REDtone Shares so acquired are subsequently cancelled, the Proposed Share Buy-Back will result in the issued and paid-up share capital of the Company as at the LPD to be reduced as follows: Existing issued and paid-up share capital Assuming full exercise of the remaining options available under the ESOS Maximum number of REDtone Shares that may be purchased and cancelled pursuant to the Proposed Share Buy-Back Resultant issued and paid-up share capital after cancellation of REDtone Shares purchased under the Proposed Share buy-Back Notes: *Minimum Scenario **Maximum Scenario No. of REDtone Shares ‘000 388,603 - 388,603 (38,860) 349,743 15 Total RM 000 38,860 - 38,860 (3,886) 34,974 No. of REDtone Shares ‘000 388,603 27,197 415,800 (41,580) 374,220 Total RM 000 38,860 2,720 41,580 (4,158) 37,422 * Minimum scenario assumes that there is no further exercise of the options available under the ESOS prior to the implementation of the Proposed Share Buy-Back. ** Maximum scenario assumes that all the remaining options granted and to be granted under the ESOS which was exercisable into 27,197,000 new REDtone Shares are fully exercised prior to the implementation of the Proposed Share Buy-Back.
Page 1 and 2: THIS CIRCULAR IS IMPORTANT AND REQU
Page 3 and 4: DEFINITIONS (CONT’D) “RHPL” :
Page 5 and 6: PART A LETTER TO OUR SHAREHOLDERS I
Page 7 and 8: On 10 September 2009, the Board ann
Page 9 and 10: 2.3 Principal activities of the Com
Page 11 and 12: 2.5 Nature of RRPTs, classes of rel
Page 13 and 14: (e) If a member of the Board or Aud
Page 15 and 16: Notes: 1 Deemed interested by virtu
Page 17 and 18: PART B LETTER TO OUR SHAREHOLDERS I
Page 19: 2. DETAILS OF THE PROPOSED SHARE BU
Page 23 and 24: 4.6 Shareholdings The effect of the
Page 25 and 26: 3. Deemed interested by virtue of i
Page 27 and 28: FURTHER INFORMATION 1. Directors’
Page 29 and 30: On 31 October 2007, our Board had a

redtone international berhad - Announcements - Bursa Malaysia

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