|Latest Forum Topics / Hotel Royal Last:1.73 -0.03
Rights: Cheap funding at Shareholders expense?
|Hotel Royal is definitely maximizing the benefits as a public-listed company. Running low on cash and/or working capital? Start issuing rights!! The last Hotel Royal rights issue was in 2018, with the rights shares priced at $3/share. Barely 4 years later, another rights issue, this time priced at $2/share. In both rights issues, the justifying reasons were the same: repayment of bank loans and working capital. There is absolutely nothing wrong about the rights issues. It is exactly why companies want to be public-listed: to have a cheap source of funding (from shareholders, of course!). In this situation, shareholders have been given the short end of the stick. If shareholders had participated in the 2018 rights issue, they would have seen a drastic decline in the value of their shareholdings. To make things worse, shareholders will need to dig into their pockets again to pay for this latest rights issue, to ensure their paper loss is minimized. Shareholder apathy (especially from minority shareholders) is the major factor that has caused a lapse in the accountability standards of the Board of Directors. It is obvious the Board of Directors have not engaged sufficient good enough talent to run Hotel Royal and/or lack vision on where Hotel Royal is headed in the (near) future. Sure, blame it on Covid, but wasn't the 2018 rights issue supposed to propel Hotel Royal to a better foothold with the competition? Apparently not. Shareholders in general continue to suffer...
|Useful To Me Not Useful To Me