(14-12-2010, 10:15 AM)lonewolf Wrote: [ -> ]Not so. Excess rights are subjected to allocation by the rights manager. Only your allocated 1,250 rights shares are guaranteed if you choose to exercise them.
The remaining 750 excess rights will depend on the subscription level. In most cases, the rights manager will give priority to minority shareholders to round up to broad lot so I would say that your chances of getting that 750 rights shares is very very good.
In fact, I have participated in >30 rights issues and I can remember only 1 issue where my holdings was not rounded up.
So if you can afford it, it pays to put in an applications for the excess rights.
No, I mean when you apply for the excess rights on top of the entitled rights.
Are you required to pay for the excess rights? If not, each unit will only be costing $0.50.
If you are required to pay the theoretical price of $0.20 for each excess right, then it would make more sense to just buy them off the market.
(14-12-2010, 10:50 AM)iisterry Wrote: [ -> ]No, I mean when you apply for the excess rights on top of the entitled rights.
Are you required to pay for the excess rights? If not, each unit will only be costing $0.50.
If you are required to pay the theoretical price of $0.20 for each excess right, then it would make more sense to just buy them off the market.
At this moment you dont need to pay anything when you applied for the excess rights.
Upon exercising the rights (turning them into shares), which will happen 1 to 2 weeks down the road, then you need to pay up $0.5 for each right.
I hope this helps.
(14-12-2010, 12:15 PM)level13 Wrote: [ -> ]At this moment you dont need to pay anything when you applied for the excess rights.
Upon exercising the rights (turning them into shares), which will happen 1 to 2 weeks down the road, then you need to pay up $0.5 for each right.
I hope this helps.
Ah, so it will be cheaper than buying odd lots off the market to round them up.
Hi hi, i am kinda a noob in something
I just bought some First Reit Rights today.
After i make payment for them, how do i exercise them?? ie pay the 50 cents each?
(14-12-2010, 10:50 AM)iisterry Wrote: [ -> ]No, I mean when you apply for the excess rights on top of the entitled rights.
Are you required to pay for the excess rights? If not, each unit will only be costing $0.50.
If you are required to pay the theoretical price of $0.20 for each excess right, then it would make more sense to just buy them off the market.
Yes. Of cos you will need to pay for your excess rights application in full at the time of application at the ATM.
Say you are allocated 1,250 and you decided to apply for another 750 excess rights.
You will then need to pay 2000 x $0.50 = $1000 at the time of application.
If your excess application are successful, then you will be credited with 2000 rights units (essentially the mother units) into your cdp account.
If your excess application are not successful, then the application monies will be refunded to you.
If you have bought nil-paid rights from the market, do ensure that the rights have been credited into your CDP account before you exercise them at the ATM.
I just remember something. If I am not mistaken, only the original unitholders who were allocated the rights can apply for excess rights.
If you buy the nil-paid rights from the market, I think your application for excess rights will eventually be rejected. (I need to check on this again cos I have never buy and exercise nil-paid rights bought from the market)
I know rights application can be a little confusing. But you just need to go through the process a few times and it will be no more confusing than your normal shares trading.
(14-12-2010, 06:26 PM)lonewolf Wrote: [ -> ]...
Hi Lonewolf, I understand your point but I think you are slightly mistaken on what I'm trying to say.
I have existing units so I have entitled rights as well as nil-paid rights bought off market.
If I were to buy nil paid rights and exercise them, a unit cost would be approximately $0.50 + $.165 = $0.665
However If I were to apply for excess rights, I would only need to pay $0.50 per unit (excluding those exercised with entitled rights). Am I correct to say this? It would seem then, applying for excess rights to make up a whole lot would be more cost efficient than buying odd nil paid rights off the market.
For nil paid rights holder who try to apply for excess, it seems to be a 0% success rate according to the CNA forumners.
There is no certainty that you will get all of the excess rights you applied for. So purchasing nil paid rights gives you more certainty. Always apply for excess but don't expect much...treat any as bonus.
Yep. I have both.
Golden Rainbow's is certainly being an enigma with its action. I can't seem to find any background on it via Google.
There is some speculation that it is cash strapped and thus raising funds to exercise its rights. If that is true, it would have sufficient funds after today (assuming that the 10 million married deal was from them).
Some numbers on Golden Rainbow.
Shares held before - 25,000,000
Shares sold - 15,626,000
Shares left - 9,374,000
Sale of shares proceeds - $3,769,420 (assuming avg sold px @ $0.67)
Married deal proceeds - $6,550,000 (assuming negligible transaction costs)
Rights held before - 31,250,000
Rights sold - 13,012,000
Rights left - 18,238,000
Sale of rights proceeds - $2,146,980 (assuming avg sold px @ $0.165)
Total capital raised = $12,466,400
Total capital needed to exercise rights = $9,119,000
It currently has excess funds of $3,347,400 instead of a shortage of $3,202,600 before the married deal was done (assuming its from them).
Just some food for thought.
(14-12-2010, 06:45 PM)iisterry Wrote: [ -> ]However If I were to apply for excess rights, I would only need to pay $0.50 per unit (excluding those exercised with entitled rights). Am I correct to say this? It would seem then, applying for excess rights to make up a whole lot would be more cost efficient than buying odd nil paid rights off the market.
For nil paid rights holder who try to apply for excess, it seems to be a 0% success rate according to the CNA forumners.
Yes. You are correct in this aspect. Sorry if I din understand you correctly.
As an existing unitholders, effectively you are only paying 50c for new units; including those excess units you choose to exercise.
My past experience with REITs right issues indicates you will have some success with your excess rights applications. For most of my excess rights applications for REITs, I was allocated units to round out to board lot + an additional lots. So I definitely would not say it is 0%.
Bare in mind that there will be some who cannot exercise the rights (foreign owners), or some who forget to exercise, or some blur who dun know what to do and some who simply too lazy to exercise. So there are usually some fats left to go around.
Good luck! (Not vested - for now)