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thanks a lot, but why would they want to give shares away, when they are trying to raise money? I have about 25,000 shares and they have just given me 9,000 of the nil-paid. From what you say, if I do nothing I will get the 0.30 or so from the sale of these as a gift. or do I assume that the main shares will fall by the same amount after the RI? yours in confusion,
Sound advice from rbrand. The Nil-Paids are the rights you have received in this offer, 3 of them for every 8 shares you previously held. It is your choice to pay the 56p to convert them to full shares, sell them in the open market and receive approx. 33.5p for each of them, or let them lapse and you will then receive the price they can be sold for once the RI period closes. As a rule of thumb these Nil-Paids - so called because you haven't yet taken up the right to purchase them - are quoted as the difference between the current sp and the amount you have to pay to exercise the Rights. So in this case 56p + 33.5p for the Nil-Paids = the current sp of 89.55p. These Nil-Paids are created as a vehicle to give you the value you lose when the sp drops reflecting the effect of a greater number of shares at a lower price once the RI takes effect, ie, the value of your shares before, and the value of your shares plus the Nil-Paids immediately after, should be very roughly the same. It is then your choice what you do with them, either pay to convert them to fully paid shares so that you still own the same share of the company, or sell them to effectively reduce your stake in the company and receive a sum roughly equal to what you have lost with the drop in sp on your existing shares. Not explained very well but I hope you can follow what I'm trying to say. The timetable of events for this RI - see RNS of 25/9 - states that they have to paid for in full by 11am on 9th April, but suggest you check with your broker to see when their last date is. Like rbrand I have also taken up my rights, and I've also bought a few extra Nil-Paids on the open market. ATB.
These are the shares you have been allocated -your rights. Your broker must have sent you instructions. You have until friday 4 april to pay the 56p a share. If you don`t bother they will be sold and you get the proceeds later. Personally, I always buy the rights.
Could someone please enlighten me about the nil-paid shares in this RI? I understand about the 3 for 8 offer at 0.56, but what's the idea of the nil-paids? my trading acount is sudeenly showing a whole bunch of nil-paids, which I had no idea were coming. Hope it's not too dumb a question, especially as this my first-ever posting on a chat thingummy (have been investing for 5 years, but still have an awful lot to learn!) thanks,.
wobo, the dilution due to the RI is already factored in the share price; future price movements will be determined by market sentiment, RSA / Insurance sector news etc and not by the RI itself. Having said that following a RI price can move lower if a substantial overhang of the new shares has been left with the underwriters - unlikley to be an issue in this case as there's over a 30p premium on the nil paid rights. I can't offer advice as to whether to take the loss or to hold on; you need to do your own research and decide what works best for you. If you've exceeded your CGT allowance in the current tax year it might be worth taking the loss by Friday close this week in order to reduce your tax liability.
What are your thoughts on the 5 for 1 consolidation being muted?
Thanks for the information - very helpful. Now I can consider my options. If I invest in the RI will the new shares created by the RI not weaken the share price further? Should I bail out with a loss of a few hundred? Should I hold on for better times? Perennial questions I'm sure to the seasoned investor....
http://www.telegraph.co.uk/finance/markets/marketreport/10730716/Market-report-RSA-lifted-by-activist-stake.html Sorry if been posted before....
wobo, the ex-rights date has passed therefore you can sell your nil paid rights, your original holding (or both) without affecting your entitlement to the 3375 nil paid rights.
I hold 9000 RSA shares. My rights issue entitlement is 3375. If I want to sell up and get out of RSA, can I sell my rights immediately and then my shareholding or do I need to hold the shareholding until the RI is concluded? Thanks in anticipation of any assistance/comment.
I agree with what you say about the AV BB and the chit chat always congratulating themselves on some share or another you did well to sell for over fiver. RSA do look a fair bet at this price Good luck
I think it only fair that one of us comes on here to flag up that Aviva made up much of the ground it lost yesterday morning in the afternoon. Might that signal that the overreaction and hysteria created has settled. I don't know and don't really care as I sold my Aviva shares at over £5. I stopped posting on the bb as I wasn't the first poster to observe that there was very little chat about the share in question just loads of tips and chat about other shares amongst a few friends and colleagues - a bit like the bby bb was for several years until some holders must have complained to lse. In fact, I tried to get ask a couple of questions of one of the stalwarts on that bb which resulted in him closing his lse account though it looks like he might have morphed into another name now - maybe I should have gone after Kirsty Wark's job after all. Think a few more on topic posters have arrived now. " I retain my interest in RSA because at some point there will be money to be made (and you may be right that the time is now). " Your words my friend and not anything you could have deduced from my few words on this bb. atb
I manage a relative's investments which includes RSA. We've added the necessary funds to her dealing account and changed the default option (which is decline) to accept. Funds have not yet been debited but they should be upon expiry of the 'take up' deadline. Once the RI is out of the way and any overhang left with the underwriters is cleared the SP may well advance a little. My relative will probably still be left with a small loss due mainly to a small percentage of her RSA holding being inherited some years back when price was over £3 - we can then decide whether to hold on or take a modest loss which will mitigate CGT on her other holdings.
Aviva down over 7% and rsa up nearly 2%. I think you should pop onto the aviva board where you said last month you were holding shares and give them some of your valuable input that is assuming you didn't sell your aviva after the budget. atb
Assuming shares pre rights were a £1. Then after the 3 for 8 rights issue @ .56p. The shares should trade @ .88p. So I will leave these alone until I can purchase at say 85p. Then I would say they would be good value.
holding in company notifications
It cost me around £30 to sell rights then buy new shares my RI value £4700 i'm not complaining
Thank you for the explanation. Makes more sense than all the tech lingo I've read elsewhere. Trigger pulled. Regards
You may well be correct, though I can't think of a single RI I've been involved in over the years - admittedly all FTSE100 shares - where the sp has taken a hit after the RI period has ended. In fact they've all done rather well. ATB.
are you mad ! dark side of the moon -the lunatic is in the house
Although your post is correct in most ways, in a number of recent rights issues the price has dropped dramically. The reason for this is although it is underwritten there are very few times when it is near 100% acceptance. This means there is an overhang which needs to be sold into the market which oten leads to uncertainty. A lot of people do not understand rights issues and consequently make decisions without understanding the full implications. Some people dont understand the record date and nil paid rights. Really depends on take up. Large take up price normally stabilieses and sometime goes up. Low take up sometimes leads to a price drop.
No, it doesn't work that way. The 'Theoretical ex-rights price' of 84.5p was set by the closing sp of 95.2p on 25/3, with the shares trading ex-rights on 26/3. You currently hold a number of Nil-Paids with a current value of 31.75p which when added to the 56p you are about to pay adds up to the current sp of 87.75p. You need to compare the current sp to the 'Theoretical ex-rights price' of 84.5p to determine whether you have made a profit or not, and not the 56p you pay to take up your rights. As you can see the sp is currently approx. 4% above that figure so you are currently better off. Finally, the sp - subject to general market trends - will not move significantly from this point when the RI is complete as it is fully underwritten. The fall from close on 25/3 to open on 26/3 took into account the dilution of the RI. Hope this helps. ATB.
Why opt to pay two sets of dealing charges when you could have taken up your rights for free?? If you couldn't afford to take up all of your rights you could have taken up some of them and let the other rights lapse to get your money back, avoiding costs. ATB.
I have read what I can re the RI and am about to pull the trigger on the allocation but just thought I'd run this past you as there seems to be a lot of expertise on here. The only way I can lose on the new shares is if the Sp drops below 56p?. Is there likely to be a drop when the RI is complete?
I sold my nil rights @32p and bought new shares @88p with proceeds ,We'll see if i did the right thing