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Yes Jnoor123. If you're a holder at close on 27th you are eligible for the 10 for 3 rights.
On or shortly after 28th you will receive the rights in the form of nil paid rights shares. These will listed on the stock market and tradable in their own right (excuse the pun). It's quite likely the ticker with be RRN. In theory they will be tradable up until 11th November, but in the final days they'll be little liquidity in them.
If you want, you can sell these RRN nil paid rights shares, in the same way as you can sell any of your shares. As it stands at the moment you should be able to sell them for about 44p per rights share. Given that you'll receive 10/3 rights shares per current RR. share it means the rights will be worth about 147p per current RR., should you decide to sell them. If you decide to take up the rights, you forego this money (which is why the total cost of taking up your rights is a lot more than simply 32p per share).
If you wish, you should also be able to buy the nil paid shares.
The reason the nil paid rights shares (ticker possibly RRN) will trade from 28th at about 32p below RR. is because it costs 32p to exercise the rights.
If you do nothing at let the rights lapse, by defauly you are deemed to have elected to sell them. They will get placed in the rump on 12th November and you will receive your share of the proceeds. This should happen even even you have a CFD position, but you may find you have to assert this quite forcefully with your CFD provider!
Poleaxe, going back to your post @ 15.52 yesterday.
When trading the nil-paid shares on RRN were you saying theyll be they be priced 32p below whatever the RR SP is?
Will I then need to pay additional to have them fully paid?
RR. is a FTSE 100 company. If holders have the option to sell their rights there have to be buyers. I'd expect them to be tradable at IG, long and probably short too.
Your right Alfe, they didnt do it for IAG so unlikely to do so for RR.
Do you guys know of any platforms that would do?
Don't expect to buy nil paid rights on T212. They didn't do it with IAGN, so it would be out of the ordinary if it happens for RRN.
Thanks Poleaxe, appreciate the info!
From 28th the nil paid shares will be traded, using a temporary ticker. By convention it ends in 'N' so it's probable it will be RRN.
In theory it should track 32p below RR. If you're thinking of buying RR. and RRN are 32p or more cheaper, then it will cost you less to buy RRN and take up the rights (make sure you don't leave it too late). If you're buying real shares (not CFD/spread) you'll also save stamp duty, because you don't pay stamp duty on the 32p.
@poleaxe appreciate your explaination, have understood it now. I went through the prospectus again and realised that if you sell after the 23rd and before the 28th your nil paid rights get transferred to the new buyer.
On your point then about buying any nil paid rights from people who qualified how do you do that. I use 212 so how do I go about directly buying the nil paid rights rather than qualifying for them?
I think you're right Cheeky. There are some bored trolls out there
Apologies, just trying to clear my confusion. On the prospectus is says you qualify at the COB of business of the record date which is the 23rd but everyone states you have to hold until end of 27th which is the voting date.
Am I missing a detail?
Jnoor123, you’ve made reference to the same question half a dozen times now, which has been answered for you, but you come back just wording it differently. You’re either bored or on the wind up or both, lol’s
There really needs to be a sticky post facility.
They go ex-rights from open on 28th. In order to qualify for the rights you need to be holding at close on 27th. If you sell the shares ex-rights from open on 28th you'll still qualify for the rights.
Overall though you may find it cheaper to simply buy the shares from 28th and not have the hassle of the rights.
If you're feeling a bit sophisticated you might find it cheaper to buy the nil paid shares from 28th and exercise them. As it's a fairly deep rights issue, sellers in the nil paid rights could push them to more than 32p below the RR. shares. If you're looking as it as a longer term investment, that might be the cheapest way to buy them.
My apologies if this is a rather noobish.
I've been playing with the thought of taking up the new shares under the RI as a long term investment, as I have some money I can put in and essentially forget about.
My question is, you qualify for the new shares under RI if you hold shares on the COB of the Record Date, which is the 23rd.
So if I hold X amount at the end of the 23rd and then immediately sell them on the 26th, purely to recoup the money, I am still eligible to purchase the new shares right, based on the number of ex-right shares I held on the 23rd?
Is that correct?
I understand I may make loss if I sell on the 26th if the SP goes down but I'm not too fussed. I like the idea of being eligible to purchase discounted shares that I can forget about for a few years.