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Whilst i don't expect any favours from the board, this is probably the first bit of decent news for shareholders since bybrook started buying in SOA1!
Interesting note in the rns :
"Whilst the quantum of the fundraising has not yet been determined, we are cognisant that minimising the equity raised by utilising higher gearing will make it more feasible for existing shareholders to participate in any rights issue. Amigo will publish equity raise specifics as well as detail of its future business plan and new lending performance ahead of a shareholder vote to approve the raise." Looks like more bond based borrowing is on thr cards here.
Guess you'll know the kia-ora advert followed by the monster munch haha
no, that was um bongo
amigo doing a presentation for investors and bondholders!
I think they mean the bondholders.
The investors are just a pain in the #ss.
Rumandpoker, I am also going to get a financial advisor to help in the future,I've actually lined up mystic meg, Ali bongo,Fred Goodwin and Clinton baptiste.
Basically the dream team of financial investing advice,,,
Although I think Ali bongo may be dead.
Yes, sounds like a good plan. Really struggling to understand this!
Personally, I will be holding long term as I think we are under-valued...assuming I'm able to take up the RI.
I also intend to hire a financial advisor at the time of the RI to help navigate as best I can through unfamilia territory..perhaps you should do the same, mtel.
Mtel, nobody knows buddy.
Just hang tight and see what happens.
There's some exciting stuff happening! Save some dosh to go through the RI, or sell up when then time is right for you.
Something big is coming .
Really don’t know what to do! Do you think the sp will rise at all before the ri? I paid 11.5p
If shareholders vote against it, we go into the wind down plan.
I am sure they will line up institutional investors to guarantee the RI if existing shareholders don't take it up . And sure they'll do that with an enhanced discount to the already discounted RI....
Hypothetical questions, what happens if the shareholders vote against the rights issue?
what happens if the rights issue proceeds but not enough people buy them to fulfill the required raise?
Thanks hexam.
If the sp goes lower then they will probably find it more difficult to raise whatever the amount it is that they want to raise. As even though everybody will still have to stump up the same amount to take part (assuming whatever the amount they want to raise is unchanged) it will look much bigger when compared to their existing shareholding. If you sell the rights instead then you are crystallizing much of the the loss between now and whatever the sp falls to.
So the RI itself doesn't really change, it just means everybody is starting from a worse position, which no-one I would think wants (assuming they're currently invested).
So if the sp goes lower its better or worse for the ri?
Excellent summary Hexam. Only thing I would add based on my experience with IAG.
The rights issue happens on a secondary market. If the rights are in demand the amount you can sell each one for an increased amount. And of course if the demand isn't there the value of each right could decrease. I had to sell some of my IAG rights at a lower price than they were released at onvthe secondary market, to purchase more IAG shares. I 'technically' made a loss, but IAG bounced back after the issue and I made a very tidy profit.
So please be aware that this is likely an additional variable you will have to consider.
Thank you. That’s very helpful.
You should be able to sell some or all of your rights.
So using the example given of you owning 400,000 shares and so meaning your current shares are worth about £20k (at TODAY's sp of around 5p) and them wanting to raise £70m then options include (ASSUMING SP STAYS THE SAME):
1) Taking up full rights in which case it will cost you around £60k (as per @Jimmyg56) and your total value of shares immediately after the RI should be worth around £80k (i.e. £20k+£60k).
2) Selling all your rights. If 19:1 then you'd be selling for around £16k and your existing shares immediately after the RI would be worth around £4k. If it is 9:1 then you could sell the rights for around £12k and your existing shares would be worth around £8k. Again the total equals £20k (the amount you started with).
3) Somewhere in between including tail-swallowing where you sell enough rights and use these to buy new shares so that your value of shares immediately after RI remains at £20k (and you've not shelled out or received any money)
Of course the sp will change and we don't know the terms, including the amount to be raised, but the following rule should always apply so long as it is possible to sell the rights:
Value of your shares before the RI plus new money you invest
= What your shares are worth immediately after the RI + Cash from any rights you sold
It's not quite as simple as that as market sentiment obviously affects the price throughout the process but if neutral then you do not gain or lose value because of an RI regardless of what you decide to do (so long as you don't just let the rights lapse).
Of course if you choose to sell the rights then you don't benefit as much from any subsequent rises in sp as you have a smaller share in the company. On the other hand you don't suffer as much if it falls as you've already banked some money.
In short whether you take up the rights should depend on how much confidence you have in the company post RI - just as with any share investment. And of course on how much you can afford and are willing to risk.
Bit waffly but hope it makes sense.
Thank you. I’d better do some research!!
You will be allocated Xk rights. You can sell some of your rights and use the funds raised to buy the remainder. It is called tail swallowing.
Flipping heck!! What happens if I can only do some of them?
Mtel, my best guess is that current holders will need to pay 15p per each existing share to take up their full rights.
Looks like you have around 400,000 shares, so you’re probably looking at around £60,000.
That is based on Amigo looking to raise £70m (RNS, December 2021).
Thank you
We won't know until we know how much they want to raise.
The amount you'll need to pay is:
V*R/M
V = value of your shares
R = Total fund raise
M = MCap
If your shares are valued at £20k, Fund raise is £25m and MCap is £25m, then you'll need to subscribe to a further £20k to have the same shareholding.
If fundraise is £50m, then you'll need to pay £40k.
The number of shares you get is based on the share dilution.
Blindfolded wrong handed darts.
Multiply whot you land on by a thousand.
That should give you a figure.