SINGAPORE (Oct 21): Chip Eng Seng’s net asset value as at June 30 stood at $1.29. Following its rights issue announced in August and completed in September, NAV fell to $1.15. Yet, CES last traded at 62 cents, and below the theoretical ex-rights price of 67 cents announced in the rights issue document. Why such a big discount to NAV and a discount to TERP?

The rights issue — which was only 53% subscribed — raised $96.3 million only because CES’s controlling shareholders, Gordon and Celine Tang, subscribed for the 46.85% of rights shares that were not taken up by minority shareholders. At the end of the rights exercise, the Tangs held 36.35% of CES, up from 29.73%.

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