Viking warrants deserve a new review

WE featured the warrants issued by Viking Offshore and Marine in this column on July 10 when they had just been listed. Arguably, featuring them again just 12 weeks later might be a bit too soon; however, they were the market's most actively traded company warrants on Friday when they rose S$0.001 to S$0.004 on volume of 2.1 million while the underlying shares also perked up, rising S$0.002 to S$0.016 with 16 million traded. If we assume that heightened activity suggests something may be afoot, then a second look may prove instructive.

The Viking warrant was part of a renounceable and non-underwritten two-for-five rights issue announced in May that included one free, detachable warrant for every two rights shares that were taken up.

The warrants have a five-year life span, carry an exercise price of S$0.025 and can be exercised at any time from listing until expiry. Even with Friday's rise the warrants are still out-of-the-money, which means early exercise is out of the question.