eSun (0571) cancelled its placement plan
eSun (0571) has announced that they have terminated their placement plan because (i) the recent increase in its share price and (ii) the uncertainty resulting from the injunction brought by Passport Capital (Passport Special Opportunities Master Fund and Passport Global Master Fund). On the other hand, eSun will vigorously seek damages and remedies against Passport in the hearing on 22 January 2009. At the same time, the Court has asked Passport to provide a bank guarantee of HKD 120 million in the case the Court rules favourably towards eSun for compensation of damages. This amount of HKD 120 million is the total amount of money that the placement (new shares plus warrants) could have brought to the Company.
It seems like eSun and Passport will fight ’vigorously’ in court. Passport has won part I of the battle — the placement is not going ahead already. Will eSun win part II of the battle? Personally I would think that eSun should be able to get something from Passport — definitely not the entire HKD 120 million, but probably a few millions? One fact that I believe is very favourable towards eSun is that the placement price was actually above the then-trading price when the placement was announced. The share price jumped only after Passport filed an injunction against eSun.
