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 Bizarre day for  ICON OFFSHORE BHD ICON (5255)

PETALING JAYA: Shares of Icon Offshore Bhd went limit up in early trade, but the gains were short-lived as the stock came crashing down in the afternoon session in what has been another bizarre day for investors in the oil and gas company.

Brokers contacted by StarBiz said the investors were caught surprise by the company’s plans to list its rights shares earlier than expected.

“The market was caught by a surprise because the announcement that the new shares and warrants of Icon Offshore will be listed on Feb 18, compared to its earlier announcement to list them on Feb 20,” a broker said.

“The share of Icon Offshore went reeling after the announcement and fell dramatically,” the broker added.

Shares of Icon shot up as much as 30 sen in early Monday trade after its designated trading status was removed by Bursa Malaysia.

The relief rally, however, was cut short at midday.

In a filing with Bursa Malaysia yesterday, Icon Offshore said 2.6 billion new shares and 654.5 million warrants will be listed on the local bourse today.

Notably, under the rights issue exercise by Icon Offshore, the company offered the rights shares on the basis of 100 rights shares for every Icon share held, at a subscription price of 10.5 sen apiece.

The rights shares come with free eight-year warrants on the basis of one warrant for every four right shares subscribed, convertible to new Icon shares at 16.5 sen each.

The stock tanked to close down six sen at 17.5 sen with more than 59 million shares transacted. The volume traded was more than double the total number of outstanding shares of 23.5 million.

This was not the first time for Icon Offshore shares went on topsy turvy trading session.

Last month, the marine offshore provider underwent a 50:1 share consolidation exercise that saw the number of Icon Offshore shares reduced significantly from 1.18 billion shares to 23.5 million shares.

Amid a confusion among traders about the consolidation exercise, shares of Icon Offshore went limit up twice and fell drastically within a short span of time.

This led to the decision by Bursa Malaysia on Jan 28 to declare the stock as a designated securities status today.

The bourse regulator said the decision to designate the Icon securities was “due to excessive speculation observed in the trading of the securities and has been taken in the interest of ensuring a fair and orderly market. With the designation, trading in the counters will require payment upfront before buying and a free balance of securities before selling.”

“Investors are advised that their investment decisions should be made on an informed basis, including an assessment of the fundamentals of the company,” Bursa said then.

Investors may well heed this sound advice, again.

Ekuiti Nasional Bhd (Ekuinas) owns a 42% stake in Icon Offshore.

https://www.thestar.com.my/business/business-news/2020/02/18/bizarre-day-for-icon