Omani Co (12/11, amended)*

Omani Co is a stock exchange listed company that is concerned by its current level of debt finance. It plans to make a rights issue and to use the funds raised to pay off some of its debt. The rights issue will be at a 25% discount to its current ex-dividend share price of $8 per share and Omani Co plans to raise $300 million, all of the proceeds will be used to repay 9% bond to whatever extent possible. Omani Co believes that paying off some of its debt will not affect its price/earnings ratio, which is expected to remain constant.