OUE

OUE: Substantial s/holder Golden Concord Asia (GCAL) had disclosed that pursuant to a financing arrangement in Jan 11, it has delivered 53.3m OUE shares to a counterparty (Credit Suisse) with a right of return. This resulted in GCAL’s direct interest in OUE being reduced to 5.43% but deemed interest increasing by 5.43% but its total stake remained unchanged at 67.07%.

It now appears that CS has disposed of 42.6m of the pledged shares back in Jan 11, leaving a balance of 13m shares. GCAL has decided to unwind the financing transaction & take back the remaining shares while relinquishing the right of return of the 53.3m shares.

Accordingly, the unwinding has resulted in a fall in GCAL’s total interest in OUE from 67.07% to 62.98%. This also means that GCAL has failed to report the shareholding change since Jan 11.

What was essentially a `share sale' (with a call option) was denied by GCAL until now. A poor case of corporate transparency here by the Lippo Group indeed.

The share sale took place 8 months ago, yet nobody is the wiser. Although there is no fundamental impact on the company, the credibility of OUE mgmt will be called into question. Note that the stock price plunged 27% prior to this anncmt. However, it may be a good opportunity for GCAL to pick back the shares if the price falls low enough.