DBS to issue European Style warrants on CapitaMalls shares

The 30,000,000 proposed warrants, priced at S$0.202 each, should entice possible investors.

DBS Bank Ltd announced on Monday that it is proposing to issue 30,000,000 European Style Cash Settled Call Warrants relating to the ordinary shares of CapitaMalls Asia Limited, otherwise known as the underlying share, according to a DBS report.

The warrants are cash-settled warrants which entitle a warrantholder to be paid a cash settlement amount (if positive) in accordance with the terms and conditions.

The issue price of each warrant is S$0.202. Every warrant will initially relate to one underlying share. The warrants have an exercise price of S$2.1525 per Underlying Share and may only be exercised on 28 January 2011.

DBS said the exercise price is based on 105.00 per cent of the initial underlying share price of S$2.05 used for the pricing of the warrants. The warrants carry a premium of 14.86 per cent and a gearing of 10.14 times.

The warrants will commence trading on or about 27 July 2010 on Singapore Exchange and will be traded in Singapore dollars.