Member Info for Bonz1957

Don't sit on the fence BigRobbo, tell us what you really think of the Yanks. lol. ATB.

How else would they raise the £775 million they need?? They want an injection of money to keep the business going and are offering you the inducement of cheap shares as a means of getting more money from you. If they just asked you for £5,000 you would very likely tell them where to go, so they offer you £5,000's worth of cheap shares and hope you will agree. The shares closed at 92p the day before the RI, so your shares were worth approx. £23k. Taking into account the effects of these discounted shares the sp dropped to 82.5p when they opened the next day - though quickly rose - but any loss you suffered in the drop in sp was replaced by the value of the 9000+ Nil-Paids you were credited with. That is how a RI works, you are offered discounted shares as a means of attracting fresh money into the company. It has been exactly the same in all of the RI's I have been involved in during the past 40 years. Hopefully you will have a better understanding when the next one comes along. You may find the article below explains it more clearly than I have done. http://www.investopedia.com/articles/stocks/05/062905.asp The fall in sp taking into account the issue of these discounted shares has already happened, overnight last week when they fell from 92p to 82p. The fact that they are now trading above this level is partly down to the fact that the markets like the RI, and partly down to the Stock Market rising slightly. While, as has already been pointed out by others, the sp could fall by a few p's when the RI closes - if a lot of the Nil-Paids are not taken up and a large overhang of stock is left with the underwriters - this is unlikely to happen. All of the shares are now treated the same way, as either you will take up your rights and pay your 56p, or you will sell them and others will pay the 56p. There will be none left that are not taken up, that is the role of the underwriters of this Issue. If they are left with more stock than they want then they will sell them off slowly at the best price thy can get, it would not be in their interest to sell them all in one go, depress the price, and make a loss. Think of it as a Supermarket selling you tins of beans. They have thousands cluttering up their stock room, but know if they try to sell them for 45p a tin they will not shift them very fast. But if they offer 4 for £1, or even 10 for £2, they will fly off the shelves. Your decision is to take up your rights and retain the same share in the company that you had before, or to reduce your stake by selling the Nil-Paids and using the cash for other ventures - no different to you selling shares to raise the £3,000. ATB.

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.

Your comments made me look back through my records - once I could find them!! I bought into WTB back in 3/96 at a cost of 708.5p a share, if only everything owned then had increased by a factor of 6!! And I have received quite a bit of my original stake back over the years with numerous share splits and returns of capital. My records from '96 make interesting reading with many of my holdings then no longer existing due to t/overs, etc. FWIW I do think WTB would benefit from a 10:1 or even a 20:1 share split to make them more tradeable. Even a modest £1000 investment today would only buy 23 shares. Maybe if they were valued at 430p or 215p more people would be tempted to buy and maybe create more upward pressure on the sp. ATB.

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.

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.

The date and time by which you need to pay for your rights or sell the Nil-Paids. If you do nothing by this time they will lapse and you will then receive cash for them when they are eventually sold.

Not really very terrifying when as you say with the rights we are approx. 5% ahead. And not everyone will be in a position to take up all of their rights, which is why some will sell enough of their shares to fund their rights take-up. Agree with your view of future prospects, although there will be no Final div and next years Interim is likely to be a token payment, once divs are re-instated in full this should easily be 100p+. ATB.

With yesterdays closing sp of 95.2p the 1000 shares would have been worth £952. If you had paid the 56p on the 375 rights it would have cost you £210 for a total investment of £1,162. And with a current sp of 88.15p your 1,375 shares would be worth £1,212 - giving you a profit of £50 or 4.3%. If you choose to sell those 375 rights for the 32p they are currently trading at you would receive £120, plus your original 1000 shares would now be worth ££881.50, meaning with a total value now of £1001.50 you would be £50 or 5.2% better off than you were yesterday - though you would now own a smaller share of RSA.

NO. They do NOT force you to take up any of your rights if you do not want to. If you let them lapse they are sold and you get the cash proceeds, less your very small share of any dealing costs.

You are correct QE, no charges to take up your rights. Also, if one doesn't want to take up their rights, and doesn't want to pay a dealing cost to sell them, they can be allowed to lapse. That way they will be taken up by the underwriters and you will receive the proceeds at the end of the RI period, ie after 9/4. ATB.

As Opium mentioned earlier, you do have the option of selling enough RSA shares to generate the cash to take up your rights. Though this will reduce your holding by 17.5% but would mean you would not have to find any new money. ATB

With the sp 4p above the 'Theoretical ex-rights price' of 84.5p, the Nil-Paids (RSAN) are also 4p up on their opening price of 28.5p at 32.5p. Looks like the market likes this RI. Currently a nice little profit for those intending to take up the RI. ATB.

You should notice in your trading account a number of Nil-Paids in the ratio of 3 for every 8 you hold. It is your choice to pay the 56p to turn them into fully paid shares, to sell them for approx. 28p (for which you will pay a dealing cost) or to let tem lapse where they will be sold after the RI closes and you will receive their value.

Your short would have been recalculated to take into the effect of the RI. With the sp up slightly on the 'Theoretical ex-rights price' you would not have made any money. ATB.

Thank you for your kind words Dear Lady. As a veteran of almost 40 years investing I've seen a few RI's in my time, they're very simple to understand and work out when you know how they work, but always seem to confuse so many people. ATB.

The end result is likely to be very similar, but if you stick with what you have and take up the rights you will avoid two sets of dealing costs. They start to trade ex-rights first thing tomorrow. ATB.

This should open tomorrow around 84p (ex-rights), with the nil-paids trading around 28p. As has been the case with previous RI's I shall be keeping a close eye on the price of the nil-paids, with a view to buying as many as I can afford (still sitting on a load of VOD money to be re-invested) should the price fall below 24p as I feel that anything below 80p for RSA shares will turn out to be a bargain in the long term. As ever DYOR and decide whether to take up the offer or sell the nil-paids. ATB.

Because technically it isn't a dividend in the normal sense. For the last couple of years they have issued rights which are then sold for cash or converted to new shares under their SCRIP Dividend Scheme. The last time they issued a normal dividend was back in Aug '11. ATB.