As Open Investments said in a press release, it will kick off a road show on September 12 as part of its additional share issue that will involve the placement of common stocks and Global Depositary Receipts (GDRs). On Tuesday, September 11, Open Investments unveiled its intention to float up to 2,038,930 shares or some 17.7% of its charter capital. Proceeding from the company's current stock valuations, the SPO could net roughly $570 mln. In the course of SPO procedures the company's present shareholders will enjoy the right of first refusal to pick up SPO stocks in proportion to their holdings in the company's charter capital as of May 31, 2007. The SPO price will be determined after the deadline for exercising preemptive rights held by the company's current shareholders expires.
It's noteworthy that Interros, which currently controls some 60% of Open Investments, announced its aspiration to exercise the right of first refusal and snap up the company's additional shares. Thus, if these stocks are offered under the preemptive right at a discount to the current stock valuations, the additional share issue, apart from the target of raising cash for the implementation of the developer's current projects, could be viewed as a way to pay extra cash to its shareholders.
We are upbeat about the company's intention to raise additional investments to execute its current projects in the cottage construction segment and also replenish its land bank. We are of the opinion that the company's strong positions on the countryside cottage construction market and also robust financial results achieved in H107 will drive investors' interest in the company's shares.
Currently, we have no official recommendation on Open Investments stocks.
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