Member Info for Slownsteady

So you could do what I intend to do. Rather than invest more money, I'll simply sell my Rights and buy the Shares at their ex- Rights price. I'll of course incur some costs (Dealing, Stamp duty + bid/offer spread), but since I bought in at �1.35 ish, I'm sitting on a 46% gain.

Hi George. here's the calculation. Say the price is 200p The ex Rights price (the price to which it would fall) would be: (200x2) + (70x3) divided by 5 = 122p . Ex Rights Value of your shares = 900 shares x 1.22 = �1098 Your Rights (on a 3 for 2 existing shares basis) would total 900/2 x 3 = 1350 shares. These would be valued at 122 - 70 = 52p Your Rights would be valued at 1350 x 52p = �702 So your holdongs would be worth �1098 + �702 = �1800 Which is the same as 900 x �2.00 = �1800 So it makes no diff to the value of your holdings. I've done all this for you before?

Foxiwii... that's what totally underwritten by Citi and GS means. Any slack will be picked up by them. Clearly the recent strengthening of the sp is because buyers want in on the RI. Keep shorting.

You're spot on HH. At 180p, the ex Rights would indeed be 114p. But I'd add that that petrafied would have 7,500 Rights which would be priced at 114-70 = 44p which he can sell to compensate for the fall in sp. So. Current value of his 5000 shs is 5000 x 1.8 = �9000 ExRights his 5000 shs would be valued at 5000 x 1.14 = � 5,700 (plus Rights of 7500 x 0.44 = � 3,300 ) Total = �9000 So its a purely mathematical calculation.

Jesus lse... you're talking through your backside. If you don't know what you're talking about, don't try to give Advice to a newcomer.

No Malkis, read my earlier post about Rights pricing. Let me know if you want me to go over it again now that we know the details.

The key uncertainty to the below is how much they manage to divest their businesses for, therefore what the Goodwill charge off will be going forward. And how the sale of these businesses will impact earnings. If they take their time and avoid a forced seller situation they should mitigate this to some extent.

HH/MB - The Sunday Times reported they expect profits to come in at �275 million. My calculations make that a p/e of 4x . Even if the Rights issue adds 70% to the shares in issue, then that gives us a p/e of just under 7. The question is then, would you buy this Company @ 7x P/e with a cleaned up balance sheet? I would. And have.

Its obvious. But I wouldn't give shorties the time of day, let alone pass on any knowledge.

Ok, let me illustrate with an example. Stay with me on this one! Say (for simplicity) - Company is worth �1bn @�1 a share. And the Company announces it wants to raise �700 million on a 1 new share for 1 old share basis. The Rights Price will be 70p a share. On ex Rights day, there will be a mathematical adjustment downwards, so the 'new' sp will be �1.70 /2 = 85p. The Rights will be priced @ �1 - 85p = 15p. If you have 100 shares, then you can either all your (100) Rights @ 15p which will match the mathematical fall in the price. Or you can sell part of your Rights @15p. and use the proceeds to buy the balance Rights (on date of completion) that you haven't sold. Or you can use spare cash to pay for 100 'new' shares. If the price then moves up by 10p, then the Rights will be priced @15p +10p = 25p. (It can work the other way as well of course).

Rights Issues are a complicated subject. As long you have the shares the day before ex-rights you can participate. But if you want to take up, then have cash ready or you can sell your rights or you can sell enough of your rights to take up the balance. The Price will fall to adjust for the lower Rights price. Hope that helps. If these Boards are true to form I'm not expecting the courtesy of a 'thank you'.

I'll let you all into a little Not so secret - p/e c. 2.5. Even if Rights Issue increases the capital base by 70% (tradeoff - No debt) the p/e comes in at under 5. I'm glad I stuck this year's ISA �20K allowance into it yesterday.

Good post lonlon. Frankly the BOD needs to make him backtrack on the Rights Issue. That'll have this shooting up, as happened with Provident Financial.

Is this news? They did say before they would reveal Issue details and strategy with Results. But I didn't know the date... which is why (coincidentally) I tried, but failed, to contact them. It would have been much more interesting to know the size of the Issue (�700 m?) and (less importantly) the discount - although we know what the outlay in � terms would be (say) today. �700 million on �1bn - i.e 70% of your current holding - if you choose to take up the Rights in full.

Amazing.... Tried calling the number on the website. No answer. Tried calling the number listed for the Head/Director of Investor Relations. Number invalid. Is this the way they run other Companies? Time for outsourcing of IR Dept. Not to mention the Company Management.

Clearly the last two posts are from shorties... and novices at that. A discounted Rights Issue would automatically result in a post Issue downward adjustment in price. Its a mathematical calculation, to account for the lower Rights price, not a collapse by itself. Those who do not take up the Rights will get a cash payment to make up the difference.

All I will say is - if Management are listening - when PFG decided not to go ahead with their full Rights issue... their sp went from �5.88 to �10 in one day. Up 70%.

(Courtesy: Sunday Times) Capita in �700m fire sale to slash debt pile The embattled outsourcing giant Capita is plotting a �700m fire sale of assets alongside a heavily discounted rights issue intended to raise a similar sum. The new chief executive of the former FTSE 100 favourite is understood to be working on a more aggressive than expected review that could lead to the sale of six or seven businesses. Jonathan Lewis, who overhauled the oil services company Amec Foster Wheeler, admitted in January that Capita needed a rescue cash call. Delivering a profit warning that almost halved the market value to �1.1bn, Lewis said Capita had underinvested and relied on acquisitions to fuel growth. The company has contracts ranging from army recruitment to customer services for Tesco Mobile. It is wrestling with a debt pile that totalled �1.2bn at the end of last year and a reported �381m pension deficit. Capita has hired the consultancy McKinsey & Co to work on its strategy and Bain & Co to help scythe through costs. Lewis said in January that two businesses would be sold � Constructionline and ParkingEye � as part of non-core disposals. It is understood Capita has now identified six or seven businesses, worth up to �700m, that could be sold in stages. With the rights issue, this would allow Capita to raise up to �1.4bn of fresh capital. The company has had more than 120 approaches from potential bidders interested in its offshoots. Capita has delayed publishing its 2017 results until it finalises the rights issue, which could be launched within weeks. Lewis is expected to reveal a cost-cutting plan that will strip hundreds of millions of pounds from its overheads. The turnaround drive comes amid a toxic climate for outsourcing companies, illustrated by the collapse of Carillion in January. Interserve is trying to refinance its �513m debt. The share price leapt last week on hopes that a deal with lenders may be agreed within days. Lewis has insisted Capita is not in the same position as Carillion, pointing out it has �1bn of cash and bank facilities. Its shares closed last week at 168p. A year ago they were trading at 518.6p.

If you don't mind me saying so very bluntly, you were quite mad to put your house purchase at risk for such a short time and such a small amount. Crazy. I suggest very strongly you don't do it again.

HH - In which case I owe you an apology. Sorry about the grumpiness.