What is not rightly written on JAKS by KYY

KYY has the tendency of not saying it all whenever he writes. 

Let me put into perspective. on this article that he writes. (Why I bought in JAKS)

His statements:

Malaysia’s first IPP

The YTL Group was just like any other ordinary contractor before the company was awarded its maiden IPP in Malaysia. From a humble beginning, YTL Corporation Bhd’s market cap today stands at RM1.65 bil (actually this is a mistake, it is RM16.5 billion and much more dividends before this), that of YTL Power International Bhd at RM12.8 bil and  YTL Land and Development Bhd (RM578 mil).

Additionally, the YTL Group also owns YTL Cement Bhd, YTL Hospitality REIT, among others.

Investors would recall that on Sept 29, 1992, a total power blackout engulfed the nation for several days. This landmark incident sparked a privatisation of the power generation sector that broke the dawn for IPPs in Malaysia.

In the process, Tenaga Nasional Bhd’s monopoly of the power generation sector was dismantled by then-Prime Minister Tun Dr Mahathir Mohamad as YTL Power was awarded the nation’s first IPP licence in 1993.

As a result, the YTL Group has been making unprecedented amount of profit every year. Before it secured the IPP, the YTL Group was just an ordinary contractor but today, it is so different.

What is not correct in his statement?

YTL's IPP during then was the sweetest ever that nobody else would have gotten it. Tenaga was sort of forced to do an offtake. Tenaga was asked to take up YTL's generation whether Tenaga needed it or not. In another words, in layman's term, whether there is such demand for example, 80% of the generation, Tenaga has to take it - even if there is no such usage demand. Another thing which is very important in that deal is that YTL's costs is fixed - meaning the fuel generation costs are already subsidised at a fixed rate. Other parties - if not wrong Tenaga and Petronas has to consume the fluctuations.

Please read this article if you are serious into investing into JAKS.

How Malaysia's IPP was born. 
This is obviously correct, as it comes from the horses mouth - the Executive Chairman of Tenaga then, and many more people know about this.

In fact, if you walk into Tenaga and asked people whom are in the know of the deal during those days, they will say, they will never give a project to YTL anymore, NO MATTER WHAT! That was more than 20 years back and many people today will not know about it.

Think about it, if YTL can pull a deal then in a year, why does it need JAKS to pull a deal in Vietnam over 6 years. It is not that sweet. 

Another of his statement which is not true until now

Many people also ask me when will I sell my holdings. Since I know JAKS will be making a lot of profit in the next 3 years during the construction and 40% of the profit from the sales of electricity for 25 years, I intend to keep all my shares for many years.

I obviously do not know KYY's net worth - it seems it is a lot, but HE HAS BEEN BUYING ON CREDIT. His purchases if you really read is all on pledged account. He and his wife's. How do you read this? Look at the red boxes.

JAKS although it is good, it is not generating good important cashflow for it to pay dividends even for few years to come. For a person to hold it until beyond 2020, he needs to get the company to pay him back (to support his pledged accounts) - either dividend or capital appreciation! JAKS is not going to pay dividend. Does anyone know that JAKS has never paid dividend before - not in last 17 years! Unless, KYY arm-twist the company to do that it is not obliged to pay dividend. And the company has no cashflow to do that.

If dividend is not forthcoming, he has to sell to pay his interests from the sale of his shares in JAKS. Hence, he will not hold for long term, he will sell some. He is pumping and dumping along the way.

His other holdings e.g. Latitude Tree has proven that.

See below. He bought a substantial stake (more than 5%) and continue to buy more after November 2014.

However, by Nov 2015, he has ceased to be a substantial shareholder. That's a year. He IS NOT A LONG TERM INVESTOR. PERIOD. He buys in and ask you to buy so that he can buy out.

What is unsure...

The profit of about RM400 mil for JAKS will flow back into the JV company to fund JAKS’ equity portion. In other words, JAKS only needs to fork out RM203mil to own a 30% stake in the power plant. JAKS is also given an option to buy up another 10% of the JV company.

Nowhere in JAKS announcement that says it is using the profit to put back into the JV company. Unless, he has inside information, which I would like to know as well. Also, usually, deals are not done that way - unless of course the China partner is such a nice partner - could happen.

What is correct in JAKS?

1. Please read my article here. JAKS in getting this project, assuming they can complete this project will be very good for the company, but one must know that JAKS has only 30% of the IPP (and option to grow to 40%, but even then the costs of buying the additional 10% is not known) - it is not even the controlling shareholder in that IPP anymore. However, the keyword is assuming they complete this project, which I think they can do - but remember it is 2020. At this moment, JAKS is sucking cashflow until 2020. 

2. JAKS would not be getting a deal as lucrative as YTL. In fact, no one gets a deal as lucrative as YTL. I again request you to read that article by Kinibiz (put it up again), as it is long and mind consuming to read it - including for me.

3. IPP (or concession like) projects with good IRR is great and I like projects like this - which is also why I bought into company like WCE but they will not get as sweet a deal as that company. It is true that the deal alone made YTL what it is today and even more that you do not see. (Such as with the cashflow, they were able to buy Starhill, Marriott and Lot10 at ridiculous low price during the 1997 crisis - in fact, 1 year profit and cashflow from the IPP enabled it to buy that entire piece of place in Bukit Bintang. That's how powerful it was. YTL Power was generating around RM500 million cashflow and they can buy these prime properties at RM323 million at worst of times, whose money - Tenaga and our rakyat's money!)

4. Despite whatever we can say good abut JAKS, all the good things that is written about JAKS, its main shareholders has not done anything to proof to me they are good directors and will share their returns with shareholders. This I am aware.

What is being speculated by me on KYY's latest article?

I am obliged to declare that I am the largest shareholder of JAKS and that I’m not asking readers to buy JAKS to support its share price. If readers decide to buy, then they are doing so at their own risk.

No, as proven again and again, he is asking us to support the share price so that he can dump onto us. Why? He seems to be in a rock and a hard place. While he has bought until 26% of JAKS, it appears that the current, controlling shareholder is not playing ball. They are calling a placement. It seems that there is no truce yet. The current shareholder can't push up (but fighting) to support KYY's sale, hence calling this placement in such a hurry.

Why I am writing this? I see writing by a so-called super investor as something that people follow a lot. It is important to write responsibly. I am not attacking him but would want to put things into right perspective. In fact, I am holding JAKS as well - not in large volume. I could have let him have his writing and I ride along as well. But investment is not for one to just pump and dump onto other shareholders. But for all to enjoy a long term ride. JAKS can still be a long term share.

I am surprised. I am half his age but yet has more responsibility when writing. (I need more money than him, but all the money in this world is not everything. Moreover, in investment, if one is careful and humble enough, we can survive and do well, better than taking a passive stand - this I believe)

Recently, obviously with the much speculation in shares (which is good), there are many more of these writers whom are just being greedy and irresponsible when writing. Some of whom, I have no intention of even countering. But it is for investors to be really careful and study.

YTL Power: It takes a consortium to get back into IPP business

There is no denying that YTL Power is hungry for another power IPP award after its current IPPs are ending in a year or two-s time. After losing out to several others mainly 1MDB, this time it manages to get what it wants. But only through a consortium - one tend to think that YTL will not get it if it is not a consortium?

Stansted Airport and why I feel weird

Now that we know Malaysia Airport is officially one of the bidder for Stansted Airport in London. What we do not know is that whether YTL is a party to it. Let's assume anyway it is and Malaysia Airport will be taking a 20% stake. This bid is competing against 2 other bidders - the Manchester Airport group and another Australian group which has Sydney Airport as its assets. Hence, to say that nobody wants Stansted is not true as there are 3 bidders.

Where does Stansted stands among the airports in London

We know that there are 3 main airports in London and Stansted is the smallest among the three. Among airports in UK, Stansted is No.4 along the pecking order of Heathrow, Gatwick, Manchester. BAA who is the owner of Stansted is being forced to relinquish Stansted due to anti-competitive ruling by the regulators. Few years ago, BAA (which used to own as well) sold Gatwick to another consortium, hence Gatwick is a direct competitor to Heathrow now.

Based on the below statistics which I managed to gather from each airports' reported numbers, we can see that the passenger growth is not particularly outstanding. One must remember 2012 was the London Olympics year, hence we can take a few percentage from the 2012 numbers.

Passenger traffic between 2005 - 2012

Of course UK as in all other parts of Europe is facing severe economic troubles and passenger traffic is a subset to that problem the continent faces. Stansted actually consists of less than 10% of total London passengers traffic - hence the swing can be substantial to the airport depending on the execution. And if you look at the numbers in detail again, Stansted's numbers actually shrunk from 22 million in 2005 to 17.5 million in 2012.  What is the major cause to that?

BAA few years ago actually had greater plans for Stansted. It in fact wanted to invest more by upgrading the facilities in Stansted with another runway in the plan. That sort of halted when it ran into issues where it cannot own more than 1 airport in London, hence this plan was shelved. That issue with the regulators caused BAA to concentrate on Heathrow being the largest international airport by far and it was in fact presented in its report to the shareholders for many years that it was going to focus on Heathrow.

That was probably the reason why Stansted is facing deterioration in passenger numbers. Another thing that we know is that Ryanair is the main customer for Stansted accounting for 70% of the load. In fact, Ryanair was one of the interested party which wanted to put in a bid but was blocked from doing so. Another main customer to Stansted is EasyJet, the other successful low costs airline in Europe.

Stansted being an airport for leisure, low costs airlines has always felt the pressure from its main customers, the low costs airlines themselves. Low costs airlines thrive from their size - negotiation power, high turnaround time and pressure on prices to all their suppliers. The fact that it is 70% Ryanair is one red flag by itself. If you look at the highly successful operator, if the CEO can sort of threaten Boeing to reduce its aircraft prices, and commercial aircraft manufacturing is a duopoly industry - tell me how much he can threaten Stansted. He in fact has done before (by pulling some of the flights away from Stansted to other airports, hence the lower traffic) and will continue to do so. Anytime, he sees Stansted making higher profits, he will put pressure on pricing - that's I think how powerful they are.

That characteristic smacks similarities to our own LCCT in Malaysia where Airasia is the main traffic creator to LCCT. In fact, I dare to say without Airasia, LCCT is probably not needed and there's no KLIA2. We also know that Malaysia Airport is backed by the government (and in fact majority owned) - Malaysia Airport despite the war of words with Tony Fernandez, nothing much Airasia can do as all airports surrounding are managed by one single company. Airasia had one time threatened to build another airport with Sime Darby if you can remember. I felt that Malaysia Airport did not handle the Airasia issue too well and definitely it may not be able to handle Micheal O'Leary who thrives on that. Can YTL handle that being the 80% consortium holder? Probably not, this CEO of Ryanair whom even had the guts to reduce air traffic to his own country, Ireland due to what he claims unfair practices - he can do a lot to the air traffic industry in Europe. He can increase and reduce traffic to parts of Europe if he wants to - as he has planes, strong pricing power, reach and ultimately negotiation power. I would not want to handle someone like him...but may want to look at his shares.

Now - this is what I think YTL and Malaysia Airport wanted to do if they win the Stansted bid. Expansion. Reducing costs as BAA probably did not do too well with that. Reduce the dependence on a single airline like Ryanair. Or work well with them. Can they do that is the question?

British Pound is getting cheaper relative to other currencies could also be a factor. And we also know that YTL has been parking assets out of Malaysia...hmmm...but why Malaysia Airport? Fees paid for managing the airport? Is YTL paying a good fee?

For shareholders of YTL, if the company has assets mostly overseas, I can see possibilities of reduction in dividends as most companies do not want to repatriate money back here to pay dividends. Sometimes, there are tax implications - not all the times though. Have to question the management.

YTL Cash Rich vs Malaysia Airport cash strapped

I was again reading something and just wanted to highlight - again reporting, reading and don't think vs thinking and able to analyze yourself makes a lot of difference. This article by The Star today is talking about the possibility of YTL and Malaysia Airport having a joint bid for Stansted Airport, UK for a sum of RM5 billion. It is again saying YTL is cash-rich while Airport is cash strapped. Read below where I pulled out a section from The Star's reporting:
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What is clear from checks with industry sources is that YTL Corp is very keen on holding the majority in the consortium and has sufficient funds for its equity portion. YTL Corp already owns UK's utility company Wessex Water Ltd and recently acquired hotels there. YTL Corp's Tan Sri Francis Yeoh and MAHB's Tan Sri Bashir Ahmad are very much involved in the deal to buy Stansted.If their bid is successful, it will add to the list of Malaysian corporate acquisitions of iconic UK assets, following last year's acquisition coup by the SP Setia-Sime Darby-Employees Provident Fund consortium of the Battersea Power Station project.While putting up the equity portion for the bid is less of a problem for cash-rich YTL Corp, does MAHB have sufficient firepower for coming up with its RM1bil (£200mil) portion?Sources told StarBiz that MAHB can manage that amount and had the funding plans for that. However, it might not be able to spend more than that on the Stansted bid, the sources added.

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If this bid is true, YTL will need to pull out RM4 billion while Airport will need to fork out RM1 billion. Let me pull out balance sheet of both companies and let us analyze.

Latest Current Asset portion of YTL

YTL's liability and equity

Debt of YTL and Equity

Airport's Current Assets

Airport's Debt and Equity

Airport's Debt and Equity

I have actually did a simple debt / equity table, please see below.

YTL and Airport Net Debt / Equity

Assuming the project is won at RM 5 billion, whose balance sheet actually looks better? Look at the lower portion. YTL's net debt / equity of 1.30x vs Airport's net debt / equity of 0.64x assuming it uses debt financing to fully finance its bid. YTL's way above gearing of more than 1 vs Airport's gearing of below 1. So who is actually having a stronger balance sheet here?

Of course I may not be agreeable for Airport to bid for a project which it owns only 20% especially in London (wonder why more Malaysian companies go London???). To me, Airport should just concentrate on KLIA2 as there is quite a bit of cashflow from there coming in near future and what it needs to do first is to CONCENTRATE.

And of course, you can say that I am bias as I have Airport shares while I do not have YTL - but numbers don't lie. Keep saying you are cash rich is not going to change the numbers! Good enough bankers (and there are many) will definitely know how to read balance sheet and future cashflows.

To proof my point, do a search on Google, "YTL cash". You will see many misleading articles.

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Note: Sorry, for yesterday's article, I should have used net debt / equity in which net debt is (total debt - total cash and cash equivalent). In any case, the balance sheet for Airport is definitely in better condition.

1BestariNet and my flawed rationale

I am no telco expert. But I have enough of experience to know what makes sense, what don't. 1Bestarinet is a project awarded to YTL Communications for delivering fast enough internet experience to all 10,000 schools nationwide. It is claimed to have been an open tender and YTL came out top out of a total 19 companies which tendered.

Frankly, I have originally almost written off the YTL's telecommunication initiative until there are quite a number of postings which makes me wanting to rethink (thanks for the comment) - no disrespect to YTL, but I have discounted all the other telco players like Green Packet, Redtone, and even UMobile anyway. Hence, I am not putting YTL as the only one as a punching bag for my telco thoughts. Let me put it this way, among the tycoons, Ananda Krishnan has already won this war among the telcos - while the other two, Celcom and Digi are corporate owned today. Anyone wants to take a share out from Ananda, do something else. It was the same as when Vincent Tan attempted with Digi (did not go far) and now UMobile which will not go far as well - in my thoughts. In telecommunication, its either you have it or you don't. It is not like a power generation business where it is dependent on the areas served, grid etc.

Now 1BestariNet is a way for YTL to reduce its costs of deploying wireless data communication nationwide while using the government's money to help it to achieve its dreams. It is actually not wrong as schools will need to be digitally covered anyway. Anyone who can do it most cost efficiently should get the project. Now my thoughts are this - the one which probably can do it most costs efficient should be a combination of a strong wireless provider and a fiber provider. From there, where does YES stands?

A fiber provider should no doubt be Telekom Malaysia while for a wireless provider they should be any of the three telcos - Maxis, Celcom, Digi. For YTL to get this project, it must have very strong connections or may have priced them very low to beat the competition or even both. If YTL has the committed ambition to cover the entire country with YES network, then maybe it would have used this project to achieve its ambition. For Maxis, Celcom and Digi it is a given that they must cover the entire nation or at least the bigger cities and towns with 4G.

Now, why do I think it should be a combination of a strong fiber provider and wireless player. The cities - Klang Valley, Penang, Johor Bahru and ultimately to other cities as well. Ain't TM is currently laying the fiber already? If it is charging less than RM1,000 for a 20Mbps fiber internet or more ultimately, what else can beat that from among the wireless providers? Are we saying that every student will be provided a dongle for their notebooks? What the schools need to do is to cover the entire school with wifi. Isn't that a cheaper and longer term solution? Imagine every new student will be provided with a YES dongle...that does not make economic sense.

Say 50% of the schools are located in the cities or suburban areas, providing internet to these schools are hence not expensive. A one off costs of covering with wifi (should not be much) and just monthly internet bill of not more than RM1,000 to TM. Another 40% of schools in the smaller towns? (The real problem as usual is tackling the real rural areas which probably makes up the 10%) Well, they need wireless providers which is why the 4G LTE and WIMAX providers are for. Please tell me if I am wrong deploying WIMAX solution is initially supposed to be cheaper but with the need to pay for the CPE (Customer Premises Equipment) I would think 4G LTE will be ultimately used hence that's why all the telcos are getting some spectrum for the deployment of LTE.

Going back to 1BestariNet. If YTL is to deploy fully, it would be getting RM1.5 billion in 5 years - that's what the press statement says. What the press statement does not say is whether it includes costs of accessing internet. I would think so as it does not make sense to just cover and do not provide access for it. Again, I would think the government would not ask the students to pay for access, am I right? The project is RM1.5 billion in 5 years. That comes to

RM1.5 billion / 5 years / 10,000 schools / 12 months = RM2,500 per school per month

and we are still not getting the fiber speed which can be deployed to many of the urban schools as at now.

Every student is supposed to be provided with a dongle from YES or could it be a CPE in every classroom or something like that?

Now, comes YTL's grand plan...Its objectives of doing the 1BestariNet is to grab hold of the student's market - 5 million of them altogether. It is trying to get a market share out of it to achieve its initial target of 1 million subscribers that pay so that it can breakeven. To do that it has to achieve something like 15% from the student market assuming YES already has about 300,000 subscribers currently. Hence, the students will have to be provided with a dongle so that they can access the network from anywhere, anytime - either in school, home or any public area. In school, it is free but anywhere out of school it will not be free anymore.

HOWEVER, for those students whose houses are in the more urban areas, most of them would have access at home anyway - in fact many homes today and most in future will be wirelessly connected - either from 4G LTE, Unifi (fiber to the home) or Streamyx (old ADSL technology). They do not want to pay the extra.

As for the more rural students, chances are they do not want (or could not afford) to pay anyway and if they are, their homes may also be connected with Telekom's Streamyx. And if there are no Streamyx, chances are there's no YES access as well. Hence, how is the 1BestariNet going to turn YTL into a serious enough contender in Malaysian telecommunication sector?

Anyone care to comment as I think this speculation may not run too far although may sound simplistic...as I still could not get the rationale.


Note that these are my thoughts and it may be flawed.

YTL Corp offering YTLP - WB shares to its shareholders - any catch?

I received a question on the potential rationale for YTL to offer YTLP - WB shares to its shareholders at a ratio of 1 warrant share for every 15 shares held. The offered price is RM0.20 per warrant which is a substantial discount from its current traded price of RM0.415.

My opinion:

1. Subscribe as it is a discount to the traded price anyway. You have 2 options after the subscription - sell it or exercise it. The warrant is in the money. Or about there, depends on timing.
2. As in my earlier opinion, YTL selling the warrants are due to they are not interested to exercise the shares as doing so would increase the debt of the parent anyway. As it is, the Group is already heavily geared with around RM24 billion in debt. It does not mean that the company is in trouble but they are more interested to reduce their debt at this moment of time rather than increase the gearing.
3. The cheaper offering may not mean that YTLP-WB current share price will be largely affected as YTL Power's current price is decently attractive. My take is that since they are to announce the warrant offer (shareholders will not know this until they announced), the slow drop in YTL Power's shares are probably due to this as it is the intention of YTL Corp to dispose off the warrants. They want to have a low and attractive price to allow shareholders to take up. If the price is not low, nobody would care to take up anyway.
4. Disposing off the market would look bad on the group, much more difficult and almost impossible. Hence, it looks good by doing a one off exercise such as this. At least on paper.
5. By offering the warrants, they are obviously asking you to exercise the shares as they need more cash. YTL Corp is not going to do the exercise.
6. This exercise as below, will allow YTL Corp to realise immediate gain of RM55.6 - RM60.2 million as announced below. YTL Corp's original costs was RM0.1185 per share. Why Not for them?

As published in the announcement:

RATIONALE FOR THE PROPOSED ROS

The Proposed ROS is undertaken by YTL Corp with the intention of rewarding its shareholders by offering YTL Power Warrants to the Entitled Shareholders at a discount to its prevailing market price. Further, the repayment of borrowings from the proceeds of the Proposed ROS is expected to give rise to interest savings to the YTL Corp Group.

UTILISATION OF PROCEEDS FROM THE PROPOSED ROS
1 The total cash proceeds to be raised under the Proposed ROS cannot be determined at this juncture as it will be based on the actual number of Offer Warrants subscribed for by the Entitled Shareholders and/or their renouncees.

2 Based on the Offer Price and assuming full subscription of the Offer Warrants by the Entitled Shareholders and/or their renouncees, YTL Corp expects to raise cash proceeds from the Proposed ROS of approximately RM136.5 million and RM147.7 million under the Minimum Scenario and Maximum Scenario, respectively.

3 The proceeds from the Proposed ROS, after deducting expenses in relation to the Proposed ROS (the quantum of which have yet to be determined at this juncture), will be used to repay bank borrowings of the YTL Corp Group and is expected to be fully utilised within 12 months from the completion of the Proposed ROS.

EFFECTS OF THE PROPOSED ROS
1 Share capital and substantial shareholders’ shareholdings
The Proposed ROS will not have any effect on the issued and paid-up share capital of YTL Corp and the shareholdings of its substantial shareholders in YTL Corp.

2 Earnings per share (“EPS”)
The Company’s average cost of investment for each YTL Power Warrant is RM0.1185. Based on the Offer Price and assuming full subscription of the Offer Warrants by the Entitled Shareholders and/or their renouncees, YTL Corp expects to realise a gross gain from the Proposed ROS of RM55.6 million and RM60.2 million under the Minimum Scenario and Maximum Scenario, respectively. The gross gain will increase the EPS of YTL Corp by approximately 0.54 sen under both the Minimum Scenario and Maximum Scenario. Upon the exercise of the YTL Power Warrants by Entitled Shareholders and their renouncees who have subscribed for the Offer Warrants, the earnings contribution from YTL Power to YTL Corp will be diluted. Nevertheless, this dilution will not have any impact on the earnings of the YTL Corp Group for the financial year ending 30 June 2012 as the Proposed ROS is expected to be completed after 30 June 2012. Upon completion of the Proposed ROS, the dilution is not expected to have a material effect on the earnings of the YTL Corp Group.

What could be the reason for YTL selling YTLPower's warrants?

YTL Corporation, the holding company for Yeoh Tiong Lay and family has been selling some 110.9 million warrant B shares of YTL Power over the last 2 months. At the same time, YTL Power's shares has dropped from around RM1.88 to its current price of RM1.57, around 16% drop. During the same period, the warrant, YTL-WB dropped from RM0.65 to RM0.40, a 38% drop. It is quite unusual for shareholders to continue to throw a utility company like YTL Power as usually it is regarded as a defensive stock - unless they are having the feeling that insiders are selling. What could possibly be the reasons for the disposal of the warrants?

YTL Power shares / warrant held directly or indirectly by YTL family

 Based on the above table, YTL's family control of YTL Power is safely at 55%. This is without assuming all the current YTL-WB warrants are exercised. If all the warrants are exercised, their control would have increased to 59%. Why? They are still holding a whopping 84% of the outstanding warrants mostly held via YTL Corporation. To exercise all the warrants (RM1.21 per warrant), it would have to use up RM1.2 billion of YTL Corporation's cash. As at 2011, YTL Corp has RM2.1 billion cash at company level. At the same time, it has RM1.65 billion debt.

Note, the family controls YTL Corp through a 47.92% shareholding.

So what do I see in this?

1. YTL Corporation - the entity that has been selling the Warrants for the last 2 months is not looking at holding that many warrants - that's for sure. This is because it does not see itself injecting so much of YTL Corporation's cash into YTL Power. Over the years, both companies (especially YTL Corp) have been buying back stocks. By doing that, and with the current share holding, they are definitely not worried of their stakes diminishing.
2. At company level, you would have noticed that YTL Corp does not hold that much cash. Its cash is only at net RM500 million. Yes, they would be able to raise more cash from future dividends as the warrant is not due until 2018 but again, they would prefer the minority shareholders to fork out the cash for exercising the warrants rather than them.
3. By selling, YTL Corp can at least maintain or sustain the dividend payment ratio of the group assuming the income will be consistently improving. This will also preserve its cash ratio. By selling the warrants, YTL Corp gains cash whereas by exercising the warrants, YTL Corp will need to put in more cash into YTL Power.
4. The recent MGO for YTL Cement was an all share deal which does not involve cash at all. So, we probably can see that they have tried to use as little cash as possible in their deals.
5. The YTL Cement deal has also caused the Yeoh's family holdings in YTL Corp to reduce from 52.72% to 47.92%. They have 2 ways to increase their holdings back to 50% or more (if its any important) - share buyback or YTL Corp and / or more acquisitions of the shares via the family vihicel. To do that, YTL Corp will need more cash - either by issuing more dividends off the holdings or buying back shares. They can and may do both. I however foresee, YTL Corp to be more active in buying back its shares, as what they are doing currently.
6. Hence, the selling of the warrants does not depict that the family is perceiving its share price to be expensive. It is just an insider action which is more strategic for the family than anything.

Note: If insider is selling / buying (especially in Malaysia), there could be a reason that they want you to know that they are selling or buying. What more for a company such as YTL Power which has been listed for so long. Note that the selling is done by another listed co, YTL Corp - not its private entity.