Nyzhnyodniprovsk Pipe to Increase Charter Fund Sevenfold

According to a company press release (via Interfax), Nyzhnyodniprovsk Pipe (NITR: HOLD) will vote on a 7.4x charter fund increase (to USD 19.8 mln) at its AGM on March 18. Subscription will be two-staged: (1) May 19 to June 2, and (2) June 3 to June 5. Proceeds will be used to replenish the company’s working capital and modernize the company’s facilities. Oleksandr Klymchuk: Based on yesterday’s close, the required price adjustment to accommodate the new number of shares on the ex-rights date is 86%. Historically, new share issues with a required correction of this magnitude have tended to provide a 50% or higher arbitrage profit (the concept is elaborated upon in our February 21, 2008 report).