Money for jam

I’m a shareholder in Lippo Malls Indonesia Retail Trust that has called for a massive rights issue (S$336.8m) that will not be underwritten by the five Joint Mgrs (StanChart, CIMB, Credit Suisse, BoA and UBS). Market is too volatile for them to risk their money for “peanuts”? In normal markets, they would be entitled to a fee of 2- 3% for underwriting the rights issue. This would have worked out to fees of between S$6.7m- S$10.1m.

But the five of them (StanChart, CIMB, Credit Suisse, BoA and UBS) are getting a total of S$1.5m (or 0.45% of amt to be raised) to do bugger all as I see it. This is 31.25% of the fees that will paid in relation to the rights issue. The rest of the fees will go to StanChart (financial adviser), lawyers, accountants, printers and so on.

Guess LMIR didn’t want to upset the investment banks who were planning to underwrite the issue.