From the announcement on a series of corporate exercise, it seems that existing shareholders have something to look forward to after suffering from years of massive losses.
Just a word of caution if you happen to read this article, the capital reduction and share consolidation, rights issue, private placement and proposed acquisition of Wellspring will dilute your existing shareholding massively. The issue price per share of Rm0.14 for acquiring Wellspring is based on after all the share consolidation (based on current price of 5.5 sen), private placement & rights issue, it is not a reference price of how much SMTrack is worth now. If you acquire at 14 sen today, you may be in a big loss later after share capital reduction & consolidation (4 into 1). Further more, you need to fork out money to subscribe to rights and later subject to further dilution when they issue share to acquire Wellspring.
Wellspring past financials do not seem attractive ( FY15 only with profit of USD 2.3 mil) and SMTrack is paying 16.18 times of average profit of USD 4.5 mil for FY 18 & FY19. Though there is profit guarantee, it is already built in the high PE ratio SMTrack is paying to acquire Wellspring. It looks more like a good deal for Wellspring's shareholders on the reverse take over.
Yes, many will speculate and trade SMTrack shares but just be careful, don't get caught and paying a high premium for it. Furthermore, whether the RTO will go through or not is another risk. Just my 2 cents.
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