Moon Kil Woong
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China Hydroelectric Goes Public [View article]
This is a funny issue. I guess BoA can't find anything worthwhile to invest in America. If you ask me, this is just another backdoor way for BoA to book more theoretical gains on dubious investments they can't unwind.
As for use of funds they have not determined their expenses or needs and anticipate all of it will be put in short term savings with a 10% tariff on earnings by the PRC on any investment or dividends derived from the PRC. Why do I get the feeling this is not the best use of anyone's money. At least they could have thought of some reason to need some funds asides from just wanting to over-valuate a illiquid investment.
With this Cayman Island investment investors get taxed 3x. Corporate tax, PRC tariff tax, and personal tax if they ever distribute money to you. In the meantime be happy all your money doesn't go to any working capital or fixed asset. It all goes to short term bank deposits.
I can do that myself without taking so much risk. Next time they should think of a compelling reason for more investment capital aside from trying to cash in on green energy and China themes and hoping investors are stupid and gullable.
If BoA needs more deposits go to the Federal Reserve window. Don't raise new capital just to deposit into your bank at sub 1% interest rates. Zirp is still much better.