Raven Russia Share Discussion Threads

[grahamburn] 04/6/2014 11:59

Understood. So, it's just a matter of deciding whether the prospective capital growth for the ordinaries is better than the steady income stream from the preference, though given last year's ordinary for preference exchange it's possible the company will continue reducing the size of the preference issue.

Buying back the shares tendered makes sense if you believe the capital growth prospects are good, because you can buy back more at the current market price than you tendered. Alternatively, you have the option of putting the tender proceeds into another investment - maybe even the preference!

In short, IMHO I'm not sure why we are having this discussion, or you raised a complaint in the first place.

[the monkster] 04/6/2014 11:33

i've got the prefs and ords in an isa. basically i've foregone by chunky pref coupon and replaced it with 321 x c. 10p.

[grahamburn] 04/6/2014 10:32

But if you don't buy the shares back, you'll be better off by 321 x 85p and, depending on your CGT position, will (probably) not be liable to any tax on any capital gain. With fewer shares in issue after the "buyback" and with the share price stable or even up a little the capital left in the remaining shares is actually worth more pro rata, even without buying the tendered shares back.

So, it's not as easy a calculation as you make out, especially if you look at tax paid on the preference shares dividend, not to mention the prospective capital growth in the shares vis-a-vis the preference shares.

PS Buying the shares back within 30 days may also negate the CGT tax benefit.

[the monkster] 04/6/2014 09:50

ok so got 321 tendered @85p. if i buy them back i will have "made" just over 30 quid. think i'll head back to the prefs. bad decision to convert half.

[raysor] 16/5/2014 11:58

Fangorn, not mentioning any names but it is one of the big ones. The fee is £10+vat

[the monkster] 16/5/2014 11:10

not convinced about this "dividend". certainly hope i get more tendered than a 28th of my holding otherwise i stand to make just over 20 quid if i buy them back at current prices based on my holding of 8/- shares. would be better off in the prefs surely.

[fangorn2] 16/5/2014 10:41

Which online broker is that Ray?

[raysor] 15/5/2014 11:50

Not so good for those small holders of stock at a well known on-line broker. Check out the fees for corporate actions!

[igbertsponk] 15/5/2014 11:30

Good IMS, no Ukraine effect so far.

[igbertsponk] 07/5/2014 15:20

Putin appears to be calling a halt to the silliness, hence the spike.

[grahamburn] 07/5/2014 13:49

It's unlikely that ALL shareholders will tender simply because some don't understand the procedure, so there may be some excess to share out amongst those who tender above their base entitlement. Having said that, it's probable that the take up on the basic tender will be a higher percentage than is often the case, simply because holders of this particular share are likely to be more clued up on investing than may be the case for more commonly held shares. (No evidence for that statement - just a logical deduction!)

[the monkster] 07/5/2014 13:16

i would be if i wasnt getting a premium to the mkt price - i would just sell on the mkt if that was the case. presumably everyone will be doing this and the 1 for 28 will be as much as one gets - otherwise the price of the ords would be bid up to the tender price.

[igbertsponk] 07/5/2014 13:11

They're not eroding capital. Just paying a divi as capital rather than income at the behest of their major shareholders.

[fangorn2] 07/5/2014 13:10

I would expect them to set the tender price higher yes.

As to eroding capital - best to tender a portion @ 85p, then buy back on market @ 65p. Rinse and repeat and boost your capital. Suspect that's what many are doing. Nice earner it has to be said

[the monkster] 07/5/2014 13:02

yes i understand all that, i was merely trying to understand where my income stream was without eroding my capital. are you saying that if the mkt price of the shares was back at 85p then the tender would be commensurately higher ??

[fangorn2] 07/5/2014 12:20

Yep, you need to "tender" your stake @85p/sh - your broker should be able to assist in that regard. I bought some a week or so ago, tendered the lot. Expect to hear sometime this month or result.

[the monkster] 07/5/2014 12:12

ok fg2 thanks - or i could just sell my shares. am i missing something?? wheres the income stream without the erosion of capital ?? is it because they're paying 85 p when the shares are less on the mkt ??

[kenny] 07/5/2014 11:36

In case anyone is interested, I have posted views on the preference shares on the RUSP board - it is post number 871.

[fangorn2] 07/5/2014 09:53

This pays a quasi divi - via a tender offer

[the monkster] 07/5/2014 09:06

is this not paying a dividend ??

[igbertsponk] 06/5/2014 14:19

No he doesn't ! [That was a response to orchestralis who's now realised he was wrong and edited]

He makes as he says 15p. But the hope is that the remaining shares increase in value as there are less of them.
Just as a share paying a normal divi returns to the price it was before it paid out the divi. But in this case there's less of them.

The 15p is a bit of a red herring - just designed to force everyone to take up the offer. If it was pitched at the current share price, then many wouldn't take it up.

[renew] 03/5/2014 21:34

Thanks carterit.
Unfortunately I cant make head nor tail of how this tender adds up to the yield people quote.!!!
If I buy 28 shares at say 70p costs say £19.60 Company then buys one of those shares for 85p. Ive made 15p on an outlay of £19.60
Im obviously missing some thing can anybody please give me a clue.