LPI - rights issue, some thoughts

LPI or LonPac, has been a good run for me when I bought it at RM9.80 in 2009, missed it at RM8+ :(
Net return, inclusive of net dividends, is about 94%+/-.

I was alarmed when I read that LPI was proposing to do a rights issue of  1 for 10 (held before bonus issue) at RM7. Rights issue is a touchy subject for me, especially when there's no good rhyme or reason tied to it. Thus, I did some simple logic-based calculations to aid my decision to SELL before rights issue or HOLD and buy the rights issue. All criticisms of the calculations are welcomed - I aim to learn :D.






Stocks issued (current) = 138,723,000 shares




Net Assets Per Share (current)  = $6.54



Thus, Net Assets = NAPS * Stock Issued =  $907,567,482.90


Bonus shares: 1 for 2 = 69,361,500 shares            



Rights 1 for 10 before bonus, $7 per rights  = 13,872,300 shares



TOTAL Stocks Issued after Bonus and Rights =  221,956,800 



NEW NAPS = Net Assets / Total Stocks Issued after Bonus and Rights  $4.09



Rights issue  $7.00



% premium over NAPS = (Rights $7 / New NAPS $4.09) -1 = 71.19%



Current % premium = (Stock Price $17.86 / NAPS $6.54) -1 = 173.09%



Depressed stock price of $9 in early 2009, premium = 37.61%




Whoops - my earlier post had typos from my itchy fingers, added too many zeros to the stocks issued (current). My bad.

Based on the amended data above, the RM7 for the rights issue is worthwhile, given that it is a premium of 71.19% over the Net Assets Per Share based on the current issuance + the new issuance. Most other "good stocks" are way above the 70% premium of Price / NAPS, eg. PBBank, Nestle, GAB, DLady, Amway.

Any logical error with the above thinking - assuming the NAPS are not calculated too "creatively"?