As per Qatar Financial Market Authority (QFMA) directives issued on 26/10/2015 and 04/11/2015, a new pricing mechanism specific to subscribers who request excess shares during Gulf Warehousing Company’s (GWC) ongoing rights issue has been established.
And as the directive has stated that “the value of the subscribed shares must be paid for in addition to the value of the Rights Issue, which has been priced in accordance with the Rights Issue pricing mechanism in effect during the Rights Issue Trading period. This is the closing price of the share on the previous day of the subscription with the value of the price of the Rights Issue subtracted”.
Therefore, if any existing shareholders as on 12 October 2015 wanted to apply for shares in excess of their eligible rights during the subscription period, they must pay an additional rate for the rights over the subscription rate of QAR 38.50. This additional rate is equivalent to the Company’s share price in the previous day minus the subscription price.
For example, if an existing shareholder as on 12 October 2015 has 100 shares in the company, he would be eligible for 25 rights shares. Should he attempt to apply for a total of 50 rights shares, he would need to pay the rate for the 25 shares to which he is entitled (25 X 38.50 = QAR 962.50) and then to buy the excess shares above and beyond his rights, he/she would have to add the share price as per the previous day’s closing rate minus the subscription price, In this example we assume the closing price for company’s share was QAR 60 on the previous day, hence, the excess shares would be priced at: (25 X 38.50) + (25 X (60 – 38.50)) which is equal to QAR 1,500. Added to the price of the originally entitled 25 shares, the total would be (962.50 + 1500) = QAR 2,462.50.
The period for subscribing in the rights issue shall commence on 8 November 2015 and end on 25 November 2015.