Member Info for LOTM-13

Some interesting trading today, there appeared to be a number of trades going through at well above the market price at the time!

177.478 17000 O 176.2 177.0 12:46:17 17,000

179.98 20000 O 178.0 178.6 12:55:45 20,000

179.42 91648 O 176.2 177.0 16:25:29 91,648

It will be interesting to see what tomorrow brings with the clock ticking & only 3 trading days left until XD of the special dividend & share consolidation.

I think we may see some more "Holding announcements" before then

Tick Tock

LOTM

From the document ......

The Company’s largest shareholder, Kuala Lumpur Kepong Berhad Group (“KLK”) (which holds

approximately 26.9% of the total voting rights in the Company as at 6 September 2023, being the latest

practicable date prior to the date of this announcement), has irrevocably committed to take up its full

entitlement pursuant to the Rights Issue and to vote in favour of the Resolutions. This will result in KLK

acquiring an aggregate of 37,676,850 New Ordinary Shares, representing approximately 26.9% of the

New Ordinary Shares to be issued pursuant to the Rights Issue.

--------------------------

So that is 26.9% of the right's issue guaranteed to be taken up & not left with the underwriters

--------------------------

Directors’ Intentions

Each Director who is able to participate in the Rights Issue and/or vote at the General Meeting has

confirmed in writing their intention to take up their entitlement in full, or in part, to subscribe for New

Ordinary Shares under the Rights Issue in respect of their respective holding of Existing Ordinary

Shares and intends to vote in favour of the Resolutions.

-----------------

Would be regarded as the not so good part as clearly the directors have not all signed up to take up there full rights entitlement.

LOTM

M1600

The nil paid rights are all underwritten, they are guaranteed the full £276M less costs no matter what.

LOTM

Hi Laura2022,

They were trading in the low £0.60's before the rights issue announcement & before that in the £0.80's (possibly before they sounded out underwritter's & Insto's etc about doing a rights issue).

They are now effectively £0.115 in old money (£2.30 / 20), so you could call them a real bargain compared to before.

Yet personally I don't think there near the bottom yet pricewise.

Many parts of the business are not performing well, as they are at the bottom of the cycle in that regard. Problem is no-one know's how well the various parts of the business will recover when there markets do. The up-turn seems to keep being pushed back & back.

Now if it were to perform as before when there markets do turnaround, then yes it will look like a wonderful bargain, given there are only 35% of the shares in issue compared to before. Back then the share price got as high as £5

The question is where do you catch a falling knife ? & when will the turnaround happen & will it be a good up-cycle or a weak one ?

I hope that helps.

LOTM

Hi Rohit123,

YES to own the exact same percentage of the company that you own'd before the consolidation & rights issue (other than a rounding error in part shares) you will need to pay £1.97 for each of the 6 SYNN to every 1 consolidated SYNT you owned to get there.

hmm the 82% discount is a headline grabber not the full story, the share price was around £0.60 prior to the announcement so multiply by 20 = £12.00 simply for the consolidation. £1.97 against £12 odd is a 82% discount. They were then asking you to buy 6 at that price for every 1 held which is a very hefty ratio & not in the favour of existing shareholders. because you are getting massively diluted. Those who used to own 100% of the company are left owning just 1/7th of it 14.285%

If you do nothing with the extra 500 then if the SYNT share price is above £1.97 on 13th Oct you'll get to pocket the difference. If it is below £1.97 you'll get nothing for them. If the share price is below £1.97 or very close to it you might want to hold off paying those 500 x £1.97 as you might be able to buy SYNT shares under that price in the market shortly afterwards. As the underwriters will try to get rid of any shares there left with quickly.

Effectively the current SYNT price is like £0.115 per share against the £0.40 they were at prior to consolidation day. Which is a big ouch for everyone :(

LOTM

Rohit123,

Just to clarify SYNT & SYNN are the same company. Its just that they are using the extra SYNN code for the nil-paid right's issue.

If you had 500 SYNN this morning (not sure how you got there in the 1st place as its not a multiple of 6) you must have had 83 or 84 SYNT shares after the consolidation ?

The ones you got given yesterday, if you pay the £1.97 on them then your holding in SYNT in % terms would have been exactly the same as it was prior to the consolidation & rights issue although the actual number of shares you'll have is now roughly 1/3 of what you had before, but there are now only 163.45M in issue instead of 467M previously.

If you pay the £1.97 on the 1000 SYNN you now have you'll actually increase your % holding of the company.

LOTM

Theloanarranger,

No problem.

Yes it is by times 20, the problem is the new ones at £1.97 which are 6 times larger in number.

The easiest way to think about it is that there are now roughly 1/3 of the shares in issue than before ie 163M compared to 467M.

Yes its very complex :(

Because if you'd bought before you'd also probably be getting a payment for the rights if you didn't take them up !

However you are better off financially now than buying them at £0.41 because those share are now worth just £0.115 each (with whatever cash the nil rights might bring & currently that sum is falling fast).

Personally I think before the end of the year you'll be able to buy them for the rights issue price of £1.97 but that's just my view & I'll most likely be looking to put £6-7K in.

LOTM

Theloanarranger,

If you buy the ordinary shares now at £2.40 (to keep it simple) you don't have anything more to pay on 12th Sept.

Just to be clear you won't own or be entitled to any of the nil-paid rights ones thou.

Before at £1.70 your £8,500 would have given you 5,000 shares out of the 467M in issue. If you'd bought at £0.41 you'd have 20,730 share with the same number in issue. If you buy now at £2.40 you'll own 3540 shares out of the 163.45M in issue.

So 3, 540 shares now is better in % terms than 5,000 out of 467M originally, but at 0.00217% of the company it is just under half of the 0.00444% you'd have owned now if you'd bought at £0.41

Hope that helps

LOTM

I see they want to play games today, perhaps trying to trigger some stop losses etc.

Well I've just done 2 topup's with another 5,000 shares at £1.7374 & 500 shares at a similar price neither is showing up on the LSE.

LOTM

Walkietalkie,

Personally I've never heard that saying.

You've already been allocated your nil-paid rights so those are yours to do as you wish (take-up, sell or allow to go to the underwriters & get to pocket the difference). You can also sell your original ones without it affecting anything if you wish also.

LOTM

RagstoRich

This should interest you as you're worried about the cash going forward .....

The G&A savings going forward are the game changer.

I've just been through the half year accounts looking at them & a lot of the $70M expected in G&A this year has already been paid for. So there will be a lower amount to be spent in the current half year, than you might imagine.

"Administrative expenses of $34.4m include $13.0m of redundancy costs. $6.9m in other expenses relate to expenses incurred on proposed merger which did not complete."

For comparison the figure was $21.2M to June 2022 & $40.8M for the year to Dec 2022 so $34.4M is an ouch but expected. The $6.9M is a one-off type of expense that brought the total to $41.3M.

There is also "The total additions of $16.8m in right-of-use assets include $16.0m addition in connection to additional office lease contracts in the UK."

Which was the posh new office in Edinburgh no longer going to be used & so I presume now leased to others.

The previous board spent money like confetti

LOTM

Dilution is something you really want to avoid Poleaxe, its not @ the % of the company you end up owning.

Its about getting your own break even point as low as possible, otherwise it takes so much longer to get the share price to where your break-even point is, because the baggage (the new shares are a massive drag on the valuation)

Probably best to give you examples so that you understand exactly what I'm meaning.

We're unfortunately at the high side regarding the buy in price but other's may have an even higher average cost than ours which would be terrible indeed.

Family shares were bought at £3.00 per old share lets say there were a 100 of them (there were thousands). So total original investment cost was £300. You now have 5 shares worth £2.50 each = £12.50 + if you sold your rights today for £0.50 each it would get you a cheque for £15.00 The 5 shares you're left with would then need to go to £57 each to break even (meaning the company would have to have a market value of 9.3Billion for that to occur [163.5M shares * £57] never going to happen.

So either you totally write off the existing investment or you believe that in time the company will turn it around.

If you take up all your rights then that is going to cost you a further £59.10 (30*£1.97). So you'll have 35 shares in total & they need to get to £10.26 each to break even (£300+ £59.10). Synthomer would have a market value of £1.67B at that price ( a distant dream).

You take the view (as I am) that the bottom of the share price cycle is under £2.20 after all of this is done in the next 6 months & the price will gradually recover as the company starts to perform better. You sell your rights now (I sadly can't but that's my own unique problem) & bank the £0.50's until later (£15) & you put aside the £59.10 that would have gone to the right issue.

If you get in at £2.20 you'll have 38 shares (5+33) if you hang on & it got to £2.10 then you'll have 40 shares (5+35).

With 40 shares the price has to get to £8.98 for you to break even giving a market value of £1.46B

So the braver strategy would be to invest even more than the amount you need to match the rights issue (if you see signs of trouble in how the company is performing then sell down, as you don't want to send good money after bad).

Lets say we invest £88.65 instead of £59.10 a 50% increase, at £2.20 you would get 52 shares (5+47 [£388.65 / £2.20]) which need a price of £7.47 which is still a market cap of £1.22B

At £2.10 you get 54 shares so need a price of £7.19 & market cap of £1.17B

The problem is the amount of new cash working for you against the amount you've already sunk in ie £300 originally which is a total drag, against the £88.65 which is in profit.

You actually have to wonder whether it is worth it or whether there are better investments out there instead when you're carrying such a loss of value. I will try to trade it to increase the shar

Hi Poleaxe,

I'm having to write this in 2 parts as posts are limited in size :(

I simply simplified what was written in the Synthomer document that's all.

"1. INTRODUCTION TO THE RIGHTS ISSUE

Synthomer announces today that it proposes to raise gross proceeds of approximately £276 million

through a Rights Issue.

Pursuant to the Rights Issue and taking into account the Capital Reorganisation, Synthomer is

proposing to offer 6 New Ordinary Shares for every 1 Consolidated Ordinary Share held on the Record

Date.

This is equivalent to 6 New Ordinary Shares for every 20 Existing Ordinary Shares, based on a

Consolidation Ratio of 1 Consolidated Ordinary Share in substitution for every 20 Existing Ordinary

Shares"

6 for 20 simplified is 3 for 10

-----------------------------------------------------

By doing it the way they did it was to try & make people think they were getting them at a big discount to up the take-up rate. They still wanted investors to give them close to 150% of there existing holding, which ever way you diced it.

Everything would be agreed in advance with 26% shareholder who doesn't want diluted in any way.

LOTM

Xtw2,

Sorry. on reflection I'd probably sell my right's if I could ( I can't sadly, so wasn't thinking along those lines) to lock in that extra cash (I think its around £0.47-0.50 a share currently) for re-investing at the lower share price later.

But maybe you think its already gone as low as its going to go.

LOTM

GMHK,

You got the nil-rights free & you don't have to pay for them until 12th Oct if you decide to take them up at the additional cost of £1.97 per right.

Or if you don't want to take them up & the share price is above £1.97 on 13th October you'll receive a cash payment in due course for the difference between the values. The company will make announcements as to how much is to be paid for each nil-right not taken up. You can also choose to only take up part of your entitlement & get the above on the ones you don't take up.

Hopefully reading through the various questions & answers on the various threads you'll have a better idea of what's best for you.

LOTM

Xtw2,

The 6 for 1 seems a lot because they sadly decided to confuse people by doing the consolidation 1st of all !

They could have done it the other way round ( do the rights issue 3 new shares for every 10 existing [at the price that still raised £272M] then consolidate them) & it would probably have destroyed less value than this way round.

---------------------------------------

Ok so you don't want to be diluted, so that helps me know what you want.

Personally I'm in slightly different & far more complex situation than you are, but I don't want the family holding diluted either, as I do think it will recover in time like RR. has.

My view is that the recovery will take time & I'm pretty sure the share price will go lower than it is now, I can see it being sub £2.20 once the rights issue is fully complete etc in the coming months.

If you agree with that view then let the rights lapse & bank the cash for now. Free up £3,500 in the near term & be ready to add it to the cash they gave you. Then you can buy at least 1,872 shares when the price drops to sub £2.20 you might even have enough to round your total holding up to 2,500 shares.

That's what I'll be trying to do but in a different way because I won't get access to the rights issue cash for a long time & I need a larger number of shares to stop the dilution but I want to do it at as low an overall cost as possible because the existing original family shares cost £3.00 a piece (ouch) & I want to bring the overall cost price as low as possible to lower the breakeven point going forward.

Maybe you see it differently, but that's my £7,000 game plan.

Good luck with your decision

LOTM

LuckyBear12,

All I can say for sure is that right now you are better off now than you would have been if you'd held onto the shares.

So in that way it was a good decision.

Since you've got cash in hand its up to you whether you re-invest that money in SYNT or something else in the coming days.

I will be buying some in due course, but I'm not in a hurry to do so, as I personally feel this will trend lower in the coming weeks & the overall markets are on a down trends at the moment as well (just my view & yes even on down trends some stocks will outperform upwards).

LOTM

Mr-O & PhilMin

It will probably take them a few days to get the details added to there systems, If you've not got Corporate actions showing by then, then I'd get in contact with them.

I use Barclay's & they are really slow at getting new or changed tickers added to the system & until they do that they can't give you a corporate action notice Mr-O

Mr-O you still own the same percentage of the company as you did before, it is just that there are a lot few shares in issue than before even after the new shares are fully paid up.

You'll nee to decide if you want to re-invest all the money you currently have in the company, invest some more or take some out by not exercising the rights you now have.

LOTM

No problem xtw2 :)

Al4x

No you shouldn't have had to do anything until now, you'll need to decide what you want to do before the 12th of October regarding the "rights" that are now your's.

I would go back down the chat thread & read it, that should get you up to speed on what's been happening.

LOTM

And I forgot to say you can buy back MNG for £1.93 already ! so that alone would be worth more than the 6.5p dividend.

Its a pity MNG didn't do this at the last dividend payout when I had loads of them for it :(

I probably should have considered just taking the initial loss on PHNX knowing it was going to be a down day with a view to buying back later, but at £4.75 low so far, it wouldn't be a great return :(

LOTM