Protasco: Deposit is topped up

I wrote many times about Protasco in quite negative ways, but this time there is some good news to share.

In "Protasco: more delays and less transparency" I mentioned that the deposit of securities didn't cover at all the RM 50 million paid by Protasco, due to the securities plunging in price.

Protasco announced yesterday:


"In the First Announcement, AmInvestment Bank Berhad (“AmInvestment Bank”) had announced on behalf of the Board of Directors of PB, amongst others, that as part of the terms of the SPA, a Deposit amounting to RM50,000,000 was paid to the Vendor upon signing of the SPA. Accordingly, foreign quoted securities (“Blocked Securities”) amounting to approximately the Deposit were blocked to secure the Deposit. In the event of non-completion, the Blocked Securities may at the option of PB be sold and the proceeds from the sale of the Blocked Securities shall thereafter be remitted to PB.

On behalf of the Company, AmInvestment Bank wishes to announce that since the execution of the SPA, the Company had requested the Vendor to top-up the Blocked Securities when the value of the Blocked Securities decreased below RM50,000,000 attributable to the drop in the Blocked Securities’ share price and home currency exchange rate.

As at the date of this announcement, there is 354,426,585 Blocked Securities retained by the Company. Based on the closing market price of IDR520 (equivalent to RM0.144*) for each Blocked Security as at 8 October 2013, the total value of the Blocked Securities amounts to approximately RM51.05 million."


Good news for Protasco shareholders for several reasons, that the securities deposit has been increased (and thus that the risk for Protasco has decreased), also lending more credibility to the whole deal, and of course about the transparency issue.

Although the authorities (SC and/or BM) have not yet taken any visible action, they might very well have played an important role behind the above announcement.

Regarding the announced SPA, we are still waiting for more news, it continues to be a very intriguing case. Remarkably, the main stream media have been very quiet about all the matters at hand.