I guess most of Genting Singapore PLC (Genting SP) investors must be very jittery with the current situation on Genting SP. Many will be wondering how come Genting SP is being pounded this two days?
The main reason for the fall for Genting SP is very simple. Genting SP is doing a mandatory conversion of bonds into shares.
The owner of one of two resort casinos opening in the city-state this year said it will ask the holders of its outstanding convertible bonds, amountingto S$321.1 million ($229.7 million), to convert the bonds into shares at 95 Singapore cents per share by February 9th 2010. The bonds are originally due 2012.
Imagine they are converting those bonds to shares at only 95 Singapore cents, what do you expect the market to digest this information when Genting SP is hanging around the price of $1.20 of late?
Basically, the owner is giving a discount in price to convert those bonds to share. The reasons why he is doing this is not known but it’s not going down well to the investors.
Click here to read the Mandatory Conversion Notice.
There will be heavy selling and heavy drop in price in Genting SP in the short term but i am still bullish with the prospect of Genting SP. Don’t forget, they haven’t started business yet.
I am still holding my Genting SP tight and not letting it go a single bit. If the price is right, i will buy in more. I am keeping this baby for my future wedding use. I am pretty sure Genting SP won’t disappoint.