$SUNZEN-WC (0148WC.MY)$ The modification of the contract is ...
The modification of the contract is clearly more advantageous to Sunzen.
Here's why:
1. **Reduced Payment**: Sunzen's payment decreased from 18 million to 15 million, saving 3 million in investment costs.
2. **Lower PAT Guarantee**: Ecolite's PAT guarantee dropped from 12 million to 10 million, reducing the guaranteed profit by 2 million. This lowers the performance pressure on Ecolite but still ensures a minimum guaranteed PAT for Sunzen.
From Sunzen's perspective, although Ecolite's PAT guarantee decreased, their investment cost also decreased. Assuming Ecolite's actual achievable PAT hasn't significantly changed, Sunzen gets the same 30% stake at a lower price and with reduced investment risk.
From Ecolite's perspective, while their performance pressure is reduced because they only need to guarantee 10 million PAT instead of 12 million, they receive less investment in return.
In summary, this contract modification is more beneficial to Sunzen because they obtain the same stake at a lower cost and with a reduced guarantee, thereby mitigating their risk.
I suspect that Sunzen deliberately created a warrant negative premium to obtain more cash. Typically, a warrant negative premium can be a trap, as seen with Gpacket in the past. Therefore, even with a negative premium, no one would dare to take on the risk of waiting 10 days for conversion unless they are confident in the company's fundamentals and future prospects.
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18881888 : Do they have in-house warranties at their own company?? Will they be notified if they convert or sell? Or is it just like the usual additional share annoucement? Wondering if they'll change their warrants to get more shares.
18881888 : Because recently, a large number of warrants have been converted to parent shares.
103857741OP 18881888: not the director nor top holder involved in it，should be smart trader who turn the negative premiun to their profits by the conversion，please correct me if i m wrong，thankyou
18881888 103857741OP: I think you are right, if shareholders convert their warrant, there will be annoucement right, or not??just like normal additional shares annoucement, i just confuse about this.