Monday, June 25, 2012
Elektromotive proposed rights issues are non-renounceable, which also means that investors are not given any option to trade/sell the rights, following which, if the rights are not taken up investors risks further dilution. Details of the proposed rights are as follows, 7 right shares for every 10 ordinary shares in Co and 3 warrants are attached to every rights share subscribed, carrying the right to subscribe for 1 new share in the Co. at a strike price of $0.03. Regarding the fundamentals of the Co, do note that Co. has failed time and again to deliver on its promise. Grp had previously done some investor's presentations in a few local houses, where they had promised Sky-High Scenarios with their then entry into the Electric Cars Industry, only to be disappointed by the sacking of Prince Hakeem as the grp Chairman and CEO, on the basis of accounting fraud regarding the sale of his Co. to the grp, via an RTO. We would advice caution to any investors looking to invest further into this co. Furthermore, issuing non-renounceable rights and forcing all current shareholders to subscribe for the Co. rights does not paint a rosy picture regarding the grp's own outlook and confidence in its future prospects.