Global's manoeuvres make no sense for the minority shareholders
Recent events at Global Digital Creations Holdings on the Growth Enterprise Market have caused minority shareholders some unease.
Their disquiet will come to a head on Friday at a special general meeting when shareholders will vote on the sale of the only profitable division of the company to the Carlyle Group and also on the issue of new shares, most of which go to the chief executive, amounting to 17.22 per cent of the issued share capital.
Critics say the recent moves make no sense, at least from the perspective of minority shareholders, since it deprives the company of its one profitable business, which for many was the reason for investing in the company.
There is criticism the asset is being sold too cheaply, on a price-earnings ratio of five times.
In addition, the placement to directors is criticised for being unnecessary and, at 35 HK cents per share, is what you would call a nice price given that the company after the disposal and placement will have cash of 35 HK cents per share or 40 HK cents per share depending on how the deal is finalised.