Cineworld Share Discussion Threads

[smokybenchod] 07/2/2018 13:58

Option 4 it is. Thanks all for all your help

[mozy123] 07/2/2018 13:47

as shaw states - selling enough rights to fund purchase of rights

[smokybenchod] 07/2/2018 13:09

Which option do you suggest then Mozy to receive minimal cash back and put no additional cash in. Thanks

[mozy123] 07/2/2018 12:36

If you dont take up any rights your % holding in the entire company will be diluted.

Your holding - number of shares would stay the same if you sold the rights, but you would then have cash and a reduced overall %.

[smokybenchod] 07/2/2018 12:07

Thanks for your help - I’ll take my chances with option 4 then which sounds like the best to maintain holding. Not sure why they make this so complicated!

[sharw] 07/2/2018 11:55

Option 1 means putting more money in.
Options 3 and 5 (do nothing) mean receiving money.
Option 2 could be either depending on proportion sold but option 4 is a variation of 2 where they work it out for you and sell enough to pay for the remainder so that it is cash neutral.

[smokybenchod] 07/2/2018 11:26

Thanks shawr,
Which option should i select if I want to maintain all my current holding in shares, don't want to put any more money in, and want to receive the least amount of cash back. i.e. i want to keep my original investment all in shares.

[sharw] 07/2/2018 09:54

Rights are traded in the market just like shares so option 3 is simply that - sell them in the market. The shares are currently trading at 228p so the rights will trade around 228 - 157 = 71p. EPIC CINN

In option 4 your broker will work out what proportion of your rights to sell in the market to give enough money to pay for the rest. In a simple case if the rights were trading at 78.5p you would need to sell exactly 2/3rds of them to fund the rest without putting new money in.

There is of course option 5 - do nothing - see my post 1690

[smokybenchod] 07/2/2018 09:10

I've got a message from my online broker...

Option 1 - Take up their Rights.

Option 2 - Partial take up of their Rights.

Option 3 - Sell their Rights.

Option 4 - Cashless take up of their Rights.

Whilst I understand option 1 and 2, can someone explain to me in simple language what option 3 and 4 mean? Does this mean if I select 3 or 4 I will be left with some cash and not all my money in shares? The explanation of option 4 states "Fund the take up of the Rights by selling some of your CINEWORLD GROUP Nil Paid Right" No idea what this means! Grateful for some help here. Thanks.

[clarksc] 05/2/2018 13:40

My broker has credited me with a bunch of new shares currently at £0.785.

[grahamburn] 05/2/2018 13:01

See from my broker the nil paid rights have been credited to my account.

The EPIC is "CINN" (stands for Cineworld New), but that epic isn't recognised yet by advfn. Their current price added to the rights issue prices adds up exactly to the CINE price - which is, of course, as it should be.

[typo56] 05/2/2018 11:05

You won't have received anything from your broker yet because they only went ex-rights today. If you'd sold last week you wouldn't have any rights.

[philanderer] 05/2/2018 10:58

Deutsch Bank retains 'buy' tp 360p

[grahamburn] 05/2/2018 10:56

Look at last week's RNS - all the details in there.

[clarksc] 05/2/2018 10:33

Hi,

I have not been following what has been happening. I hold some shares but have not received anything from my broker about the rights issue. Have I missed the boat or is the offer to subscribe in the post?

[sharw] 29/1/2018 11:03

typo - oops - thanks for pointing that out - corrected.

ianian4 - if you want to see how it can pan out have a look at the graph for the first half of 2014. On 10/1/14 CINE announced a rights issue of 8 for 25 @ 230p. The shares were trading at 440 immediately prior to the announcement. My records show that payment was due by 13/2. The rights not taken up were sold in the market for 338p. I did not take up and received 107.32p/rights share (108 less expenses). The share price slid and bottomed at the end of April at just over 290p.

[ianian4] 29/1/2018 08:56

Thanks for all that, Still uncertain what I will do. If you don't take them up and there is a glut, the price will be lowered , but, you are no worse off as you could always buy them cheap a little later on.

[typo56] 29/1/2018 08:31

That's a great answer sharw. It's worth correcting the typo - the lapsed rights would of course be worth 4x69p (not 4x59p), i.e. the value of the traded rights.

I think it's important because it shows, in the short term, you're no worse off if you let your rights lapse. i.e you end up with one CINE share worth 226p plus 4x69p, total 502p, which is where you were before the rights.

The reason you might want to take up the rights is because you believe in the company's prospects and want to maintain or increase your level of investment in it, not because the rights offer you a special discount over what anyone else in the market could pay. Remember, taking up the rights not only costs you 157p per share, you also lose the 69p you would have received had you let the rights lapse. i.e. a total cost of 226p, which is the same as it would be for anyone else buying new shares in the market, just you don't pay stamp duty and dealing costs when taking up rights.

I may be a silly old cynic but I think rights issues are sometimes more about corporate empire building and advisors collecting their fees, rather than improving shareholders' return on investment!

[sharw] 28/1/2018 14:26

Let's say they are 502 now and go xr tomorrow. You will have (502+4x157)/5 = 226/share so you can expect to see the shares trade at 226xr and the rights to trade at 69.

In the event that the price is still that when the rights become due and you do not take them up you will still have your one share worth 226 and your 4 rights shares will be sold at 226, the 157 will be deducted and you will receive 4x69p and all will be square (less a small fraction for dealing).

That is the main difference between a rights issue and a 'placing and open offer' - in the latter if you do not take up and the offer is at a discount you lose out.

[ianian4] 28/1/2018 09:04

Thanks shawr, I thought so, but if you do nothing, do you retain the original only worth possibly 1.57. If that is the case, I would think that it is worth taking the issue up as it is meant to be sold at a discount, so not taking it up, you will be disadvantaged to other shareholders.

[sharw] 28/1/2018 08:57

You can if you wish but it is not compulsory. When the shares go ex rights 'xr' you will have 4 rights for every share which you can trade in the market until the rights are due. If you do nothing the resulting shares will be sold on your behalf and any excess over 157p less expenses will be returned to you.

[ianian4] 27/1/2018 22:29

Can someone explain what is required of a minor shareholder with regards to the rights issue. Will I be expected to purchase 4 shares at 1.57 each for each current share that I hold.

[mozy123] 25/1/2018 12:57

Hi,

Yes depends on foreign exchange deal with them yes. Cant find any detail on it though.

Yes moving forward $ income is worth less.

As with most currency moves - they dont add or substract much in the long term.

[typo56] 25/1/2018 12:02

"$ weakness is making thier regal purchase cheaper"

That depends on their foreign exchange arrangement with Barclays. Perhaps a gain for Barclays?

Wouldn't a weaker $ make their $ income worth less?