Lamprell Share Discussion Threads

[brando69] 16/5/2014 15:37

well to be fair, the share price was down from 155.75 yesterday, when the news reached of the RI the privileged

[todismypal] 16/5/2014 15:21

For the share price to be down a mere 2p is quite frankly astonishing. Normally a rights issue send the share price into a tail spin. The presentation at 9am must have gone down well. Any holder not taking up their full entitlement is missing a real opportunity long term to make serious money IMO. I know however that serious money can be involved in buying even at 88p and its an individual decision based on personal circumstances.

[tom111] 16/5/2014 15:19

Good result today considering.

[bgwesley] 16/5/2014 14:58

Thanks for that, Plunger.

Wasn't sure exactly how it worked. I had a Rights Issue, years ago on Imperial Energy, I think. Didnt't take up the Rights on those, but had some cash back.

Many thanks

[plunger2] 16/5/2014 14:27

Normally you get rights allotted to you - probably by a renounceable letter of allotment (RLA).
So pretend I have 16000 shares I should get a RLA for 5000 shares i.e. the right to buy 5k shares at 88p. Normally I can sell this right(or part thereof) IF I don't want to take it up. So if the share price is 138p I'll be selling the right to buy at 88p. Therefore in theory somebody will pay me 50p (138-88) for the right. So by my not taking up the rights I would pocket £2,500 in this example.
Sometimes people sell enough of their rights to take up the remainder - the concept being to remain Cash Neutral. So in this example you would sell 3190 of the rights (to 5k shares)realising £1595 and use the cash to take up the remaining rights of 1810 (=5000-3190) at 88p.
Your broker will explain the process if you have one. I ain't no expert!

DYOR

[bgwesley] 16/5/2014 13:26

If you don't take up the Rights Issue, you are due a cash payment - How does that work?


Thanks

[brando69] 16/5/2014 13:20

Looks like the briefing went well and instis are buying it up to me

[plunger2] 16/5/2014 12:34

brando - agree with you on both fronts.

[brando69] 16/5/2014 10:55

the was pulled down to allow city boys to get a bargain ahead of the rights issue...

look what happened to tcg... same here... this RI will be viewed positively i think.

[mad foetus] 16/5/2014 10:49

it is not a bargain really: the irony is that whatever the price is set out, provided you take up your full share it will be cost neutral. e.g. if you own 0.1% of the company now, you will own 0.1% of the company after. All the price and number of shares issued affects is the amount of debt that is converted into equity really. And bizarrely, the price of the rights issue makes no difference: whether it was 100p or 50p would all be the same, provided the offer is only made to existing holders.

[tipjunkie] 16/5/2014 10:43

yes!! it is a bargain!!!

[bgwesley] 16/5/2014 10:18

Many thanks, srpactive.

[bgwesley] 16/5/2014 10:14

Could someone help me out here with the Rights Issue:

Say, for example, you have 1,000 shares - does that work out at: 1,000 divide by 16 times 5 = 312.5.

Can you buy 312 shares @ 88p? Sure I've got that wrong!


Thanks

[srpactive] 16/5/2014 10:02

I focus and have done for years on dividend income,
this will be another big dividend play if ( I say if )
the management can sort this out as a 3% dividend at
140p, is a very handsome 4.77% at 88p, which incidentally
the price I started buying at in November 2012.

dyor

regards

active

[kmann] 16/5/2014 10:00

I sold out here a while back to buy other stuff, and doubt I'll be buying back. Spending £50mil on the yard is a big project and could take a year to turn around. The eps will be diluted, and are the new faclilities just a pipe dream, and will they bring back earnings to boost the sp?

[aimingupward2] 16/5/2014 09:55

tip junkie, I fully agree. Given patience this will prove to be very well worth taking up indeed.

[srpactive] 16/5/2014 09:54

Yes might even load up before the cut off date, May
is a massive dividend month for me, so all funds
at the ready and in place.

dyor

regards

active

[tipjunkie] 16/5/2014 09:51

one would be an idiot not to take this up (assuming you've the cash)

[todismypal] 16/5/2014 09:49

Active and Plunger Many thanks for the RNS copy - appreciated

[plunger2] 16/5/2014 09:45

Link to Rights Issue RNS:

[srpactive] 16/5/2014 09:43

16 May 2014

Lamprell plc

5 for 16 Rights Issue of 81,363,469 ordinary shares at 88 pence to raise

approximately US$120 million (the "Rights Issue")

The Board of Lamprell plc ("Lamprell" or the "Company", and together with its subsidiaries, the "Group"), a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable industry, today announces a fully underwritten Rights Issue to raise gross proceeds of approximately GBP71.6 million (US$120.3 million). In conjunction with a debt refinancing also announced by the Company today in its interim management statement for the period from 1 January 2014 to 15 May 2014, the Rights Issue is intended to provide a stronger platform for the successful execution of the Group's growth strategy.

Highlights

-- Enables the Group to deliver on its growth strategy by improving its competitive position through operational improvements and financial flexibility.

-- Intention to raise gross proceeds of approximately GBP71.6 million (US$120.3million), facilitating its debt refinancing of US$350.0 million.

-- Will allow the Group to repay in full the borrowings under term loan facility B of its Existing Facilities, as well as reducing the Group's financing costs.

-- Supports the implementation of the Group's strategy to improve profitability.
-- Rights Issue expected to be earnings accretive for the Group over the medium-term.
-- Supported by the Principal Shareholder.

Rationale for the Rights Issue

-- Following the Company's return to profitability, the focus is now on generating sustainable long-term growth and the additional funding will put the Group on a stronger footing to deliver its strategy.

-- The Rights Issue will provide Lamprell with funds to support a capital investment programme to improve productivity, reduce operating costs, repay certain of the Group's borrowings and to strengthen the Company's balance sheet and working capital flexibility.

-- More specifically the Rights Issue will allow the Group to:

o implement a programme of automation, productivity improvement and cost reduction to enable the Group to leverage its current strong position in its core markets, particularly in the new build jack-up rigs and offshore construction markets;

o place itself in a stronger competitive position by allowing it to offer its customers a solution for new build jack-up rigs which combines high build quality, world class safety, timely delivery, as well as additional commercial optionality; and

o maintain a more cost effective and sustainable capital structure and enable further enhanced working capital availability, which would enable the Group to access a larger addressable market and support additional project wins.

Details and use of proceeds

-- 5 for 16 fully underwritten Rights Issue of 81,363,469 New Ordinary Shares at 88 pence per New Ordinary Share to raise gross proceeds of approximately GBP71.6 million (US$120.3 million).

-- The Issue Price of 88 per New Ordinary Share represents a discount of 39.7 per cent. to the closing price on 15 May 2014, and a 33.4 per cent. discount to the theoretical ex--rights price.

-- The Rights Issue will raise gross proceeds of approximately GBP71.6 million (US$120.3 million). After the payment of fees and expenses of approximately GBP4.8 million (US$8.1 million) in connection with the Rights Issue, the Company intends to use the net proceeds of the Rights Issue as follows:

o US$60.0 million will be used for a yard investment programme, including a new panel line, newer welding processes, an improved electrical distribution system and improved cutting and blasting and painting facilities, as well as supporting operational systems, with an expected payback period of three to four years;

o US$10.6 million will be used to repay in full the borrowings under term loan facility B of its Existing Facilities, after the repayment of US$ 49.5 million out of the proceeds of the Inspec Disposal; and

o the balance will be used, together with the New Facilities (once fully unconditional and committed), to strengthen the Group's balance sheet by providing the Group with a more cost effective and sustainable capital structure to enhance its working capital flexibility.

The Rights Issue, which is subject to the approval of Shareholders at the Extraordinary General Meeting, is fully underwritten by J.P. Morgan Cazenove and HSBC. In connection with the Rights Issue, J.P. Morgan Cazenove is acting as Sole Sponsor, Sole Global Coordinator, Joint Bookrunner and Corporate Broker, HSBC is acting as Joint Bookrunner and Rothschild is acting as Financial Adviser to Lamprell.

John Kennedy, Chairman of Lamprell, said:

"In 2013 the management team addressed the legacy issues that the business faced, significantly improved our project execution and returned the Group to profitability. Our strategy of focusing on our existing core activities is delivering much improved results but we expect the proposed rights issue and refinancing to strengthen Lamprell's market position further, allow us to deliver the next phase of our strategy and as a result, generate sustainable long-term value for shareholders."

James Moffat, Chief Executive Officer of Lamprell, said:

"With our operational performance and financial results now fully stabilised, we are focused on establishing a strong financial platform for long-term growth. The rights issue and the refinancing of the Group's debt facility will increase our financial flexibility, allow the Group to invest further in its fabrication yards and secure productivity improvements and cost efficiencies that will increase our competitiveness in our key markets.

Lamprell has a strong market position and is differentiated by its high standards of safety, a keen focus on client satisfaction and high build quality. 2014 has seen us converting our substantial bid pipeline into a contract win from a tier 1 client and it is my strong belief that the changes we are proposing today will enable a stronger Lamprell to further capitalise on the significant growth opportunities that we see in our core markets."

It is expected that a prospectus relating to the Company will be published on 16 May 2014 containing full details of the Rights Issue (the "Prospectus"). Once published, the Prospectus will be made available on the Group's website (www.lamprell.com), and will be made available for inspection at the Company's registered office: Fort Anne, Douglas IM1 5PD, Isle of Man, and will be submitted to the National Storage Mechanism and be available for inspection at www.morningstar.co.uk/uk/nsm.

A PRESENTATION TO INVESTORS AND ANALYSTS WILL TAKE PLACE AT 9:00AM TODAY

ATTENDANCE IS BY INVITATION ONLY

A LIVE TELEPHONE 'LISTEN IN' FACILITY IS AVAILABLE, FOR DETAILS PLEASE CONTACT

[phone]

CONTACTS

Lamprell plc [phone]

James Moffat, Chief Executive Officer

Joanne Curin, Chief Financial Officer

Natalia Erikssen, Investor Relations [phone]

J.P. Morgan Cazenove [phone]

Sole Sponsor, Sole Global Coordinator, Joint Bookrunner,

Corporate Broker

James Taylor

Nicholas Hall

HSBC [phone]

Joint Bookrunner

Nick Donald

[todismypal] 16/5/2014 09:42

It would appear that looking at the share price fall late yesterday that a certain amount of "rights issue leakage" has occurred

[todismypal] 16/5/2014 09:40

Like an idiot I have deleted the RNS from my computer. What are the dates for this rights issue please someone??

[bad robot] 16/5/2014 09:40

dead cat bounce