Rowsley New Update!

As you can see from the SGX portal, 2 new announcements are reported at 9pm+ on Sunday Evening for ROWSLEY!

You can find the links here:

• http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_39B1F43C7EB175F548257B070048154A/$file/RowsleyLtd.Announcement_03.02.2013.pdf?openelement
  
• http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_6E6B209ACBF2850948257B07004889D2/$file/RowsleyMediaRelease_03.02.2013.pdf?openelement

They are finally proceeding with the Reverse Takeover and finalizing the S$545 Million deal... The highlights are as seen below:

ROWSLEY SEALS S$545 MILLION DEAL WITH RSP, JOHOR’S ROYAL FAMILY AND PETER LIM

• Rowsley to acquire RSP in all-share deal for S$187 million

• Rowsley to acquire 9.23-hectare Iskandar Land in all-share deal from Vantage Bay for S$358 million

• Upon completion, Rowsley will reward existing shareholders with bonus issue of two free warrants for every one existing share

• Rowsley will be transformed from an investment holding company to a major real estate player

The thing that caught my eye is that Rowsley are issuing 2 free bonus warrants for every one share we own with an exercise price of $0.18...

At a current price of $0.29, it will mean:

[$0.29 + $0.18*2]/3 = $0.2167 average price per share based on current stock price if all warrants are immediately exercised.

I myself is interested in hopping on to the possible property investment idea in  Iskandar Malaysia but heard of some risks involved like easy to see companies go bankrupt, worrying about security issues and how to collect rental etc..

Therefore, lets do a simple calculation here...

Let's say i invest $10,000 at the price of $0.29, i will get around 34,000 shares & double the warrants (68,000).

Theoretically, at the end of one year, if the stock price 

(1) still remain at $0.30 & i exercise my warrants by then; the gain will be:

(34,000+68000) * ($0.29 - $0.2167) = $7,476.60

The % return is a spectular 75%!

(2) goes down to $0.15, I will not exercise the warrants and my loss will be:

[34000*($0.29 - $0.15)] = $4,760 ; a % loss of 47.6%!

(3) goes up to $0.45, I will exercise the warrants and my gain will be:

(34,000+68000) * ($0.45 - $0.2167) = $23,796.60

The % return is a astonishing 238%!

What i take confidence from Rowsley is also that the land acquired has excellent prospects; it is located within Flagship A region -> where many key players are: Citigroup, HSBC and Kuwait Finance House, major manufacturers - YKK, Celestica, Lion Group, Sumitomo.

Source from http://www.iskandarmalaysia.com.my/flagship-a-johor-bahru-city

Another point to take note is the compensation being paid out only when certain criteria are met as seen below:

This means the current management team being taken over (RSP group) will have a certain goal to look forward to when they generate significant growth in earnings...

My own Take

Since i am not ready to invest directly into property investment (although they give better returns due to leverage) even though Iskandar is a good opportunity, I may consider Rowsley since it is soon becoming a major real estate player. 

Good luck to you all then! Cheers!