Member Info for Hexam

"Whats the calculation for the actual value of the shares trading today at £6.68 versus the shares when all this is sorted out?"

£6.68 IS the the actual value (at that time) of the shares when all this is worked out - there is no calculation for the shares trading today - they are ex-rights so the calculation's already happened. What moves the sp from now on is purely market sentiment. That often continues to be poor for at least a while where RIs are concerned and it is not unusual for the price to move down much closer towards the rights price but all that is driven by sentiment. The price could also go up short-term from here, no-one can be sure - and if there is other significant news then the sp will of course respond to that too.

In time though the sp will simply reflect the performance of TUI and the sentiment that goes with it.

@CaptainSandy - I'm not sure if you are suggesting that you are £11k down overall at the moment but if you are then one thing you have missed is that you are 'only' £3k or so down overall at the moment on the numbers that you have given. This is because the new shares you have purchased with your rights will trade at whatever the prevailing sp is after the RI exercise has been completed (not £4.88). This does NOT mean though that you are gaining a windfall on the new shares - it is just the opposite side of most of the £11k loss on your original shares. They have to be looked at together.

As to your strategy being a good one then as you say that depends on the future but whilst a drop in sp may mean you can buy back your original 1673 shares at a cheaper price it also means your new 4461 shares will be worth less - so if anything you'll be better off if the sp goes up not down (unless you're assuming they will dip further before they go up which would then vindicate your strategy nicely and is actually quite common with RIs in the early trading after the exercise completes).

Sorry if that all sounds convoluted - but RIs are convoluted and what you've done has made it more so!

Agree Penta - feeling much the same.

Wolf - those were the loan numbers before the DIP and then add a $1bn on for DIP. They are still not paying on bills on time (as highlighted in Jan 4 slides) so there are still plenty of unsecured creditors still building up (unless there is some commitment to clear these first)?

I don’t know what the other creditors number was before ch11 but the secured debt outstanding is definitely around $6bn now which is the first hurdle.

Hi Wolf - I don’t know about the other creditors, just those that issued loans (the $270m out of the $6bn+ total loans). Besides the figure for all the other unsecured creditors will be constantly changing depending on which rents and other bills get paid or not.

That's right Tegop - the secured (loan) debt is around $6bn (including the DIP financing).

Out of all the loans only $270m was unsecured (including $213m of convertible bonds).

Source - Slides 26, 27 and 44 of initial slide pack.

Lots of speculation on here but hopefully we'll know some facts about what is actually happening in the next couple of days - for good or for bad.

Yep PG that’s what it boils down to - an investment decision just like any other. They discount the price for the new shares but that’s just marketing smoke and mirrors - you’re not getting some kind of bargain.

Equally you can choose to sell the rights but by the same token this is just a disinvestment decision - on the same terms.

Or you could tail swallow and stay with the same amount invested as before.

Vijay, the 1200 you bought today are just ordinary ex-rights shares i.e. they have no rights attaching (which is why they were so much cheaper than yesterday) and will just behave like any other share.

The option to sell the rights (or take them up) on the shares you held already should show up on Thursday though it might vary a bit by broker.

Sort of PG. What is not showing yet in your account is the RIGHT to buy more shares which will become actual new shares if you take up those rights. Those rights have a value and so can be sold instead.

As you have 300 shares then you will have the opportunity to buy 800 new shares at £4.88 each (£3,900). This would mean you then have 1,100 shares worth around £7 each (assuming the sp stays roughly the same) i.e. £7,700 which is also roughly what your shares were worth before the RI plus the new amount you invest (less a little as the sp of the ex-right shares has dropped a bit today).

Unlike the price to take them up the price if you sold them isn't fixed. It will vary broadly in line with the sp.

Assuming the sp stays at around £7 then I think the rights should be worth about £6k or so if you have 1000 shares. You'll soon see the actual value when they become available to sell which as I say will move up and down as the sp moves up and down.

You do though have the option of maintaining your holding at the previous level by selling enough rights to pay for the right number of new shares. In this case you don't need receive any cash but neither do you need to invest any more either. This cashless option is called tail swallowing if you want to look into it more.

"Always very painful for investors though especially if you don't have funds to buy the rights shares which is often the case!"

Why is it more painful if you don't have the funds to buy the rights - just sell them. The value is the same (all else being equal) you just have a cash sum and less invested instead.

True - but equally January's (and December's) were abysmal!

I think they were the outliers, not February which seemed more consistent with earlier months but we'll see. With ARB anything can happen and it's almost expect the unexpected...

In fact some sites (msn, investing.com) have adjusted already and are showing a 2% or so drop rather than the 40-50% shown here on LSE.

Nice try but as Bowser says, the sp actually looks like it is down around 2% at the moment (once also allowing for the value of the rights) - hardly cause for the thread title and it certainly hasn't 'collapsed'.

HC - I got an answer of 161 just doing the maths (so basically the same as you) but think there may be some improvement due to weather/keeping machines on more because of higher BTC/Galaxy running them more efficiently.

So anything up to about 180 wouldn't surprise me - but who knows?

Bowser - I think that's right even though it is complicated by the 31% of shares that are under sanctions and thereby not entitled to the rights. So the quoted TERP was 9.22 Euros or about £8.11 which is obviously much higher than the current sp and the 732p that you are quoting.

All very confusing and I think we'll only really be sure once we know the value that the rights are selling at and whether the value of our overall holding has therefore gone up or down.

Mike - I think you've got that the wrong way round. 5.55 Euros is about £4.88 not £6.30.

Nope Shakin - Charles Dickens!

CWWX - taking up the rights is NOT the only way to try to balance this out. If you choose to sell the rights because you want to, or simply can't afford to take up the rights, then this should also 'balance it out'.

If you do nothing then hopefully your broker will sell the rights anyway as the default option but I wouldn't like to test this theory.

Bantam - If you want to take up the rights then you'll have around two weeks or so to do so from Thursday (i.e. up to April 17 I think) and the price is fixed, so you should have plenty of time and you don't gain anything if you could take up the rights any earlier (as the new shares will only be credited at the end of the subscription period).

If you want to sell the rights though then the price you can sell them at is NOT fixed as just like the sp itself it will vary with market sentiment.

Either way, whatever you decide just make sure you act before April 17th.