Member Info for Hexam

Well our investments losing well over 30% of their value since the RI was announced is one pretty good reason I think?

"if you havent got any then buy ARB shares the risk v reward is minimal."

Minimal risk v reward? And it's certainly not a 'fact' that we are at a new BTC low.

That's some seriously over the top ramping.

There is good chance there will be upside but can't see ARB doing as well as most other miners who are in a far better position both strategically and financially to benefit from any upturn in BTC.

I'm not sure I understand your point Stanley. The lenders are just doing what they think will get them the most amount of money back as quickly as possible and who can blame them? It just looks like we won't get anything back as part of that.

As to valuation the net assets are less than zero at the moment and the company are not yet making profits again so I think they are still taking a risk but they obviously think the company is going to make sufficient money in the future for this to be a good deal for them. I am very optimistic about the future of cinema so think they could well be right.

I'm not sure where reputational damage comes into it. The company will be private so they don't have an sp and PIs to worry about. All they care about is how many people come through the doors and apart from a few disgruntled existing shareholders I don't think they'll lose many customers. I presume when the company has recovered somewhat they'll sell it on or take it public again by which time all this will be water under the bridge (apart from some of us) if the box office continues to recover and the industry is looking a lot healthier.

Hi Allkap - The plan still has to be approved and there is still some question marks over RoW. I'm a bit surprised it's still trading but then again all that's happened is that we are just a bit further along the road on what they already warned us, many months ago, was very likely to happen.

When we finally get to the end of that road it will go to zero - unless a very pleasant surprise happens in the meantime!

AllKap - the RI is for the new shareholders after we have lost our interest (a 100% D4E).

You can see the price here on the TUIB board though with a 15 min delay. Showing 94.2p currently.

johnpwh - I think it is pretty clear that it means no recovery (and in fact this is the precise wording in the actual agreement). I don’t think it’s ambiguous at all I’m afraid - unlike the RoW part and its implication for us.

Patience - the RNS is explicit. There is no recovery for existing shareholders in this plan.

The plan is not a dilution, it is 100%.

The RoW is the bit where there is still some doubt about what this means for us and they only say they ‘expect’ no recovery for us.

So I’m not very hopeful but I admit I don’t really understand what they are saying about RoW in the docket.

Johnpwh - the rights issue is not for us but for the new shareholders. We are wiped out before that happens under this proposal.

The RoW part is the bit that’s still unclear to me but I’m not holding out too much hope that we’ll benefit from this at all.

I agree Bonkers - I was going to stay off the board today as there is not much more that can be said although there is still an element of doubt around RoW and of course the RSA itself still has to be approved.

But even though there’s usually somebody who pipes up on every RNS claiming it is “positive” I really didn’t think there could be anyone today. How naive of me!

HNS - Fair point!

“It's a positive and predictable RNS.”

Predictable yes, but positive?

Which bit is positive exactly? The bit about the chapter 11 companies where under the proposal we definitely do not get anything or the bit about any RoW sale where it is still expected that we don’t get anything?

Please expand on what you have seen that should give us more hope than we had before?

Cheers Mike,

I think this is the most complicated rights issue I’ve even seen and I don’t think any of us has all the answers so we’re all groping in the dark a bit.

And don’t worry, I’m not glued to the screen all day - though it might look that way at times!

The rump is what is not taken up (either by the original shareholders or those that buy their rights) and the underwriters then try to sell it and if they can’t then they are stuck with the shares themselves until they can.

Hi Mike - Tbh I'm not sure what happens in the rump placing but I don't think the price would be lower than £4.88 (unless the sp itself was lower than that).

But I agree that if take up is poor and the rump is a significant size then trying to offload such shares is likely to put pressure on the price. Any rump placing I think begins on April 18.

Although I said I don't think the issue you raised will cause selling pressure on April 11/12 but instead said that there may be on the 24th when the new shares hit the market there may be some anticipation of this that does impact the sp earlier.

It can be a pattern in RIs that the sp glides towards the subscription price (in the case £4.88) and this could start on April 12 and could even argue it has already started!

Despite what others say though it doesn't always happen that the sp hits (or gets close to) the subscription price and even if it does it should only be temporary - hopefully!

...and it fooled at least 8 people so it was a good one!

Mike - When you sell the rights you are only selling rights to buy shares not the shares themselves and the current price is about £1.07 for these rights. Whoever buys the rights then has the same choice we already have i.e. they can sell the rights on again (for £1.07 or whatever the price is at the time) or they can take up the rights themselves and subscribe to new shares for £4.88. Also the fact these new shares are £4.88 is already priced into the sp (that's what the TERP calculation is i.e. the reason why the sp instantly dropped from £14 to about £7 when the RI began).

So nothing is flowing into the market at the moment at £4.88 - those shares will be purchased at that price by whoever has taken up the rights come the end of the rights exercise and those shares will only join with the rest on April 24 and be priced at whatever the sp is at the time (currently £6.23).

In the meantime the rights and shares will trade separately up to April 11/12 (when trading in rights will cease) and the price difference between them SHOULD stay around £5. It is a bit more at the moment indicating poor relative value for the rights if wanting to sell and a relative bargain if want to buy them - as you can buy the rights to buy a £6.23 share for £4.88 by only spending £1.07 now.

So not sure why there should be additional pressure on the share price around April 11/12 as no new shares are on the market at that time. Having said that if the rights price is still only £1.07 at that time then I would expect the sp to be closer to £5.95 (£4.88 + £1.07).

Come on Wolf - you know he just makes stuff up for the fun of it!

One thing for sure is that we know none of this info is from a credible source - no such thing ;-)

Hi Dboh,

All the shares are ex-rights shares including the new ones that will start trading on the 24th and so all will trade at the prevailing sp which is currently £6.23. How this sp moves until then and soon afterwards just depends on buy/sell pressure as you say and is anybody’s guess.

On and just after the 24th there may be additional selling pressure though as many mistakenly think just because the new shares were bought at £4.88 that they are making an instant profit if they sell at a higher price than this. So a dip in sp then is very possible but by no means certain.

Hi Golitha, sorry I was just drawing the distinction between your (theoretical) ex-rights price and the actual TERP which is a unique value with a set calculation (though in this case there are two possibilities)!

I also confused matters myself by saying you posted the link about the TERP when it was actually donalb so apologies for that.

The "Assuming no immediate justification to a change in MCAP" means that it is not a TERP as the TERP assumes the mcap goes up by the amount of new cash invested.

As Golitha says, nobody knows where the sp will go. The TERP is just the theoretical view of where it should go due to the RI (all else being equal) so it is useful as a reference point to strip out the impact the RI is having.

For me it is quite simple. The RI does NOT create a profit or loss in itself and so whether I choose to take it up or sell the rights is the same as any other investment decision based on do I think the sp is going to go up or down - plus usual things around risk and exposure (and in this case affordability).

All the TERP does is help baseline the SP compared to what it was before the RI. In this case though it seems that there are two possible TERPs - unhelpfully!

The sp though is currently well below the TERP whichever one you use and I'm confident that longer term the sp will recover significantly. I'm just not sure I'm confident enough to increase my exposure at this point especially as this may get a little worse before it gets better if other RIs are a guide.