* 1:3 rights issue (or 33.3%)
* Subscription price QR 160 per share (which appears to be par value + 150 Qatari Riyals premium). In Abu Dhabi, Qtel shares closed at AED 274.20 on 19 Feb 2008, and were not traded on 23 Feb 2008, but closed at AED 273.30 on 24 Feb 2008. QR 1 is about the same as AED 1.
* Date unknown
Qtel Press Release 23 February 2008:
In order to realize the future growth strategy, and to optimize the capital structure, the Board of Directors has decided to recommend to the General Assembly to increase the capital of the company by 33.3% by issuing rights of one for every three shares held, after issuance of bonus shares, for QR160 per share, subject to necessary regulatory approvals for terms and timing.
(QTEL) Qatar Telecom announces record date and subscription for its right issue
Someone was a bit slow - disclosure was dated yesterday ...
QTEL 04 May 2008:
Qtel announces record date and subscription period for its rights issue
Qatar Telecom (QTEL) Q.S.C. announces that the record date for its recently announced rights issue will be 28 May, 2008. Approval for the rights issue subscription period has been obtained from the Ministry of Economy and shall start on 8 June, 2008, and shall end on 19 June, 2008.
At the Extraordinary General Assembly held on Sunday, 23 March 2008, it was approved for Qtel to increase its capital by 33.3% or 36.7 million shares by way of issuing new shares at the rate of one share for every three held.
The share price for the rights issue will be QR160 per share (QR10 nominal value plus QR150 premium).
Other terms and conditions for subscription will be published in due course.
Pursuant to the resolution of the Extraordinary General Assembly held on Sunday, 23 March 2008, the Board of Directors of Qatar Telecom (Qtel) Q.S.C. announces to the shareholders the capital increase by 33.3% by way of issuing new shares at the rate of one share for every three shares held.
The right for subscription shall be given to the shareholders who are registered in the shareholders’ register with the Doha Securities Market (DSM), Bahrain Stock Exchange (BSE) and Abu Dhabi Securities Market (ADSM) at the closing of Wednesday, 28 May 2008, at the price of QR160 per share (QR10 nominal value plus QR150 premium), subject to the provisions of Articles (192, 193 & 195) of the Commercial Companies Law No. (5) for the year 2002 and the following terms and conditions:
Terms and Conditions for Subscription to Qtel Rights Issue Capital Increase:
1. The number of new shares offered for the Rights Issue capital increase is 36,666,667 ordinary shares.
2. The share price is QR160 per share (QR10 nominal value plus QR150 premium). The full value of QR160 has to be paid for each subscribed share.
3. The right for subscription shall be given to the shareholders who are registered in the shareholders’ register with the Doha Securities Market, Bahrain Stock Exchange and Abu Dhabi Securities Market at the closing of Wednesday, 28 May 2008.
4. The subscription period for the existing shareholders shall start on Sunday, 08 June 2008, and shall end at 1:00 PM Qatar time on Thursday, 19 June 2008.
5. The shareholders can subscribe to a number of shares lesser or greater than the ratio of one share for every three shares they are entitled to subscribe to, provided that, and with the exception of the holder of the special share and it’s wholly owned subsidiaries, no single person, natural or juristic, shall hold more than 10% of the total issued capital after allotment, or 5% thereof should such person be carrying out activities similar to Qtel.
6. No shareholder is allowed to assign to another person, natural or juristic, their right for subscription to the capital increase.
7. Application forms for subscription will be mailed to the address registered with Doha Securities Market, Bahrain Stock Exchange, and Abu Dhabi Securities Market. Additional application forms can be received from the following branches of Qatar National Bank in the State of Qatar:
a) West Bay
b) Gharafa
c) Wakra
d) Industrial Area
8. Applications can be submitted through all QNB branches and QNB Islami in the State of Qatar. In addition, QNB account holders may subscribe through QNB electronic channels.
9. Subscribers shall present the original applications sent to them by mail along with the following documents:
a) Individuals: ID or passport copy.
b) Minors: ID, Passport Copy or Birth Certificate indicating the personal number in addition to the ID of the guardian or trustee.
c) Companies: Official extract (updated) from the Commercial Register and a copy of the ID Card of the Authorized Signatory and letter of Authorization from the company.
10. Shareholders can subscribe in the following modes subject to the Terms and Conditions stated in this document:
a) Fax the application to Qatar National Bank fax number +974-4802159 or
b) Send application by registered mail to Qatar National Bank, P.O.Box 1000, Doha – Qatar. Attention: Shareholders Department.
11. The value of shares must be paid in full in Qatar Riyal either:
a) by a cheque drawn in the name of Qtel drawn on a local bank in Qatar, or
b) by providing QNB a debit authority to debit the subscriber’s account with QNB, or
c) by transferring funds through SWIFT to the benefit of Qatar Telecom (Qtel), account number 0012-921000-661 with Qatar National Bank (SWIFT code – QNBAQAQA). Any bank fees should be paid for separately by the subscriber and the amount remitted to QNB should equal to the exact value of the shares subscribed for.
12. The application forms and subscription amounts must be received by QNB on or before 1:00 PM Qatar time on 19 June 2008.
13. Restrictions on mode of payment:
a) Cash payment is not permitted.
b) Cheques must be deposited with QNB at least two banking business days before the last day of subscription (i.e. on or before 17 June 2008).
14. QNB reserves the right to wholly or partially reject any application in the following cases:
a) If the full value of the subscribed shares was not received on or before the end of the subscription period e.g. funds not received due to cheque bouncing for whatever reason.
b) If the subscriber is not entitled to subscribe.
c) If the application is duplicated, only the first application will be accepted.
15. QNB will stamp the notice and keep the lower portion and return the upper portion to the subscriber.
16. Subscriptions will not be accepted unless stamped by QNB as ‘Value Received’.
17. After submission of the applications to QNB, subscribers are not allowed to cancel their subscriptions to the capital increase for any reason.
18. Fractions of shares shall not be considered within the shareholder’s stake of shares, i.e., the shareholder’s stake shall be a whole number after omission of any resulting fractions.
19. The shares under the Rights Issue shall be allotted to shareholders pro rata to their exisiting shareholding in the company’s capital, provided that the subscription applications and funds are received by QNB and paid in full on time.
20. If any shareholder subscribes for less than their pro rata entitlement, they shall be allotted only the number of shares they subscribed and paid for.
21. The remaining un-allotted shares, if any, shall be allotted to the shareholders who subscribed for more than their entitlement of shares, pro rata to their additional subscriptions.
22. In case the capital increase is not fully covered by the existing shareholders, the remaining shares shall be offered for Public Subscription or dispensed off in the manner as directed by the Department of Trade, Ministry of Economy and Commerce.
23. The excess amounts shall be returned to the subscribers within two weeks from the completion of subscription without any profit or interest accrued on it.
24. For any clarification, please call Qatar National Bank at phone no. +974-440-7777 and ask for “Shareholder Department” or e-mail yousef.seyam @ qnb.com.qa with a copy to investor @ qtel.com.qa.
Qtel shareholders are kindly requested to verify their mailing address registered with Doha Securities Market, Bahrain Stock Exchange or Abu Dhabi Securities Market as the case may be.
Hi sharewadi thanks, finally I got entry to your family!!
Rights issue of Q-tel, how best we can benefit, any estimates on the average price after the record date? It deserves a watch! ...fimah
Hi sharewadi thanks, finally I got entry to your family!!
Yes, welcome to Team Wadi at last. Glad we sorted that out for you .
Regarding the Qtel rights issue, record date is 28 May 2008 so last trading day to be eligible for the rights issue will be 2 trading days before. Share price will adjust by 33% downwards 1 day before record date to compensate for rights issue.
For short term trading, the actual before/after record date doesn't make much difference because the price adjusts to compensate. However, in the past, the announcement of a rights issue in the UAE has sometimes prompted a sharp rise in share price - I think (AMLAK) and (EMAAR) were 2 good examples in 2005. However, if that was going to happen, it would have already done so for Qtel.
For long term investors, a rights issue is usually a good thing if shares are priced at a discount to current market price since you'd hope the company invests the additional capital in such a way that returns to shareholder are better than alternative investments, and company share price will grow. You would expect a large telecom provider such as Qatar Telecom to provide good returns.
Medium term, the share price might trend up to pre-rights issue price, just as share prices ex-dividend often trend back up to pre-dividend prices. I don't have an explanation for that. _________________ UAE IPO list | posting guidelines
Thanks SW, I think there is a catch in Q-tel. Chances of getting additional shares if there is a receiving bank for subscription in the UAE. No one will be interested in this rights assuming a good premium. Assuming the current price at 215, the diluted price should be 201. Who will wait to pay wait so much time send application / refund, etc. Here then we talk of at least 20% gain? Any thoughts?
Assuming the current price at 215, the diluted price should be 201.
Er, how's that? If there's a 33% rights issue, then AED 215 / 1.33 will adjust to about AED 160 ex-rights eligibility date (Tuesday 27 May 2008)?
Rights issue price is QR 160 per share (QR 10 par value + QR 150 premium) which is about the same as AED 160 per share, so on that basis, there seems to be little point. Wait until 28 May 2008 and buy as many as you want at the reduced price (or wait until after rights issue and buy the ones that all the subscribers want to sell).
That's not quite accurate because Q-tel will have an extra 110 million shares x 0.33 x QR160 per rights issue share = QR 5.867 billion added to Shareholders Equity to do something with. Return on Equity (from QTEL 08Q1 report) is about 28% so Qtel could generate an additional QR 1.6 billion profit from that money in a year, if they continued at that rate of ROE.
That's a fairly significant hike on the QR 2 billion or so they make per year. So long term, share price should see a reasonable gain.
However, other investors will surely have figured that out already so the bigger question is why the share price of Qtel has fallen since the beginning of the year, and since the rights issue announcement in March 2008 (part of that I think was an adjustment for the 10% bonus shares issued). _________________ UAE IPO list | posting guidelines
Hi SW,
if i buy Qtel 100 shares i should pay 21500, then i am eligible for 33 shares for which I should pay @ 160, ie., 5280 then my total cost for 133 shares is 26780. My average cost 26780/133 shares = 201. My feel is that shareholder is not given any good price but a huge premium, therefore, the rights issue will not get popular....So, Buy 1 share for entitlement, then apply for more @ 160, chances of getting more share looks better....hope you are there....fimah
Ah yes, your calculations look correct. I'll come back to this. I'm still trying to figure out why my logic is wrong .
I thought share prices were restated on ex-dividend dates depending on number of shares outstanding, which would be up by 33% in this case. But of course dividend shares do not have a premium payable by shareholders, whereas rights issue shares do. I guess that explains it. I'll have to go and look it up somewhere. _________________ UAE IPO list | posting guidelines
Ah well, I think if it was, the market would have figured that out already and there'd be no gain .
Hang on, how'd you get 25% gain? Sell the QR 160 shares for QR 201? But you had to buy shares at QR 215 to get the rights issue shares and they're now worth QR 201, so the gain is offset by the fall in pre-rights issue share price.
However, longer term (months/years), yes you could make a gain as shares will hopefully creep back up to pre-rights issue price and more. Not sure I'd call it zero risk though . _________________ UAE IPO list | posting guidelines
I'm assuming the date of this disclosure is 30 June 2008, it doesn't say, but was posted on the ADX website yesterday.
ADX 30 June 2008:
(QTEL) Qatar Telecom and Qatar National Bank (QNB) announce the closure of Qtel Rights Issue
Qtel 30 June 2008:
QTEL Rights Issue oversubscribed by 2.2 times
Qatar Telecom (QTEL) and Qatar National Bank (QNB) announce the closure of Qtel Rights Issue
H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani, Chairman of Qatar Telecom Q.S.C. announced that the subscription to the Qtel Rights Issue has been successfully closed. The Rights Issue was managed by Qatar National Bank.
The value of shares subscribed to in Qtel's capital increase reached QR 12,734,523,840. The value of shares offered for subscription to the capital increase was QR 5,866,665,920 indicating an oversubscription exceeding the targeted amount by QR 6,867,857,920. The subscription reached 217%. The shares were allotted to subscribers in the ratio of one share for every three shares held as declared in the Rights Issue Terms and Conditions. The remaining shares were allotted to those who had oversubscribed pro rata to their oversubscription at 2.22%.
The subscription to the company's capital increase through QNB and all its branches lasted for 12 days (June 8 to June 19 2008). Qtel issued 36,666,667 shares for subscription to the company shareholders registered in the Doha Securities market (DSM), Abu Dhabi Securities Exchange (ADX) and Bahrain Stock Exchange (BSE) on May 28, 2008 at the price of QR160 per share (nominal value of QR10 plus a premium of QR150).
QNB confirmed that the surplus amounts will be refunded to the subscribers. QNB will also coordinate with the DSM, ADX and BSE in order to register and add the allotted shares to the shareholders' accounts. These shares will be listed on the DSM, ADX and BSE as soon as possible.
Kindly be notified that CSD department has updated Qatar Telecom (QTEL) share-book, by listing the subscribed right issue shares for ADX investors.
The shares has been allotted at the shareholders registry (CSD) account, as of closing of July 2, 2008.
Qtel shares fell 2.6% to AED 185 on the ADX today, from just 2 small trades with AED 3.7 m of turnover. _________________ UAE IPO list | posting guidelines
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