London Scottish Bank Share Discussion Threads

[davius] 05/6/2008 14:58

They were, they're just a little cheaper now ;)

[cyclingnut] 05/6/2008 14:30

and I thought these were cheap when I bought at 11.25p the other day!!

[sa0705] 05/6/2008 13:03

lol wirral, thats happened to me loads.

u from the wirral?

[cyclingnut] 05/6/2008 11:55

would these little monkies be an attractive takeover target or not?

[meanm] 05/6/2008 10:48

grlz - Yes, that was my point. Your post concurs with my assertion that this £32.5 million is the total regulatory capital requirement.

As far as I can see, LSB is, or will be very shortly, covered in terms of their regulatory shortfall.

Now all we need in for the larger institutions to buy in. I have a feeling some of that might be going on behind the scenes, but that is only an opinion.

DYOR

[grlz] 05/6/2008 10:15

M4 + Mean - it's not confusing, LSB have been quite open and transparent on the issue. Check my post 1058 (29 May) I detailed the capital issues, should it be of interest.

The number is going to move around based upon lending volumes - LSIF does alter this further. Hitachi backing LSIFs previous inter company loans, not a bad position as previously they were unbacked and Hitachi are solid and well funded, benefiting as they still do from credit enhancements secured from its previous parent company of the same name.

Rights issue concerns me WAGN today are doing a 10/1 with a +60% discount shares have tanked, No2 faller today. They tied their announcement with the results.

[ihavenoclue] 05/6/2008 08:37

Well then we will get clarification by the end of this month.

[meanm] 05/6/2008 08:35

The regulatory capital requirement is simply based on the volume of lending within LSB. Yes, the SHORTFALL may have grown due to further losses incurre by LSB, but it is nowhere near the £32.5 million, as this is a total capital requirement. As I said though, to counter any SHORTFALL growth is the sale of LSIF.

My principal point is that the SHORTFALL is not £32.5 million.

[city girl] 05/6/2008 08:26

No. This would ignore any further erosion in the capital base since the year end arising from further provisions (and there could well be some?)and further trading losses (which there will be). This whole recent statement seems to confuse the picture rather than clarify. IMHO.

[meanm] 05/6/2008 08:20

cyclingnut,

It is perhaps not quite as simple as that, but it certainly is not the £32.5 million that is being touted on the boards.

[cyclingnut] 05/6/2008 08:17

so.... easy really... £12.5m shortfall...they get £9m from the current sale which means they need to raise a further £3.5m.....yeah?

[meanm] 05/6/2008 08:09

I think we should clarify what the regulatory capital SHORTFALL is before we go any further.

In the statement regarding the new loan facility, it states that LSB needs £32.5 million worth of regulatory capital. It does not state that this is a SHORTFALL!

The last stated SHORTFALL in regulatory capital, dated 1 January 2008, was given by the FSA as "finalised at £12.7m."

Now, to me what is required and what is a SHORTFALL are two completely different issues. "£12.5 million" is the SHORTFALL and given LSIF was sold, it should be readjusted.

The £32.5 million is what is required in regulatory capital in TOTAL by OCT. I think it is clear that LSB would have control of a large proportion of this capital, otherwise it would not be trading.

Thus, as far as I am concerned the market has misread what is happening, or at the very least, some of the posters on here have.

DYOR

[m4p] 04/6/2008 22:50

Would it be possible for someone to get some clarification on this £19 million
as nobody seems to know what it means?

[m4p] 04/6/2008 22:46

LSB has a regulatory capital of a minimum of 32.5 million pounds to be raised by Oct. 31, 2008, as a condition of the new lending facility that has been put in place. It announced back in January that it had a shortfall of 12.7million for the regulatory minimum

-surely this sale of 9 million has solved the regulatory issue?

The rights issue is to recapitalise RW?

Therefore any further disposals clarification about the intra company loans or the effect this disposal has had on reducing the 32.5 million requirement would
do the share price no harm at all?

Maybe the market is just waiting to see the colour of Hitachi's money b4 it reflects in the sp?

If I were managing the company I would be delaying announcing the rights issue
for a while yet in order to give the share price a chance to recover a wee bit

What does everyone else think?

[ihavenoclue] 04/6/2008 21:42

Davius - 4 Jun'08 - 21:58 - 1166 of 1166


> every share consolidation i have seen has been followed by a drop of between
> 25 - 50% even in decent companies where they have no funding issues.

I have to disagree with you in this case, PRTY consolidated recently and the share price is now significantly higher.

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You can't disagree as you don't know which shares i have seen consolidated LOL But as you say PRTY rose after consolidation so not all bad news - i am just not keen on them

[davius] 04/6/2008 20:58

> every share consolidation i have seen has been followed by a drop of between
> 25 - 50% even in decent companies where they have no funding issues.

I have to disagree with you in this case, PRTY consolidated recently and the share price is now significantly higher.

In my view consolidation isn't much of a problem either, the market cap is so small that whether the shares were priced at 10p or £10 each makes little difference. However, what IS most definitely a problem is that new shares cannot be issued at below their nominal value. The LSB shares are '10p ordinary' so under the current structure the minimum rights issue price would be 10p. Unless the share price moves ahead they WILL need to consolidate or restructure the shares in order to decrease the nominal value to below the current share price.

I think that the board would be happier with a little more in the way of disposals and closures first with perhaps a modest rise in the market cap to perhaps £20m before attempting a rights issue. This remains a share to hold on to for a month or two in my view.

[ihavenoclue] 04/6/2008 18:33

grlz - 4 Jun'08 - 17:47 - 1164 of 1164


ihnc - not intended as a deramp but the FACT is a fundraising is coming and naturally will be discounted, by how much is anyone's guess.

The difficulty imho is the current low share price - it's pennies making any discounted rights price look imho ridiculous if LSB wishes to be taken seriously.

==============================================

grlz, i am not disagreeing entirely with what you are saying as they do need to raise cash. But how much now is anybodies guess and the senario you painted is one if the company was in dire straits .. i.e. worse than BB.'s current state.

I believe the share price will rise before there is a rights issue. I believe that once the water is a little clearer at the end of this month the market sentiment will improve.

I am not sure about consolidation .... every share consolidation i have seen has been followed by a drop of between 25 - 50% even in decent companies where they have no funding issues.

I guess we will have to see what LSB have to say the end of this month. If Directors buy in early next month that should give the market some much needed confidence in LSB.

Regards
IHNC

[grlz] 04/6/2008 16:47

ihnc - not intended as a deramp but the FACT is a fundraising is coming and naturally will be discounted, by how much is anyone's guess.

The difficulty imho is the current low share price - it's pennies making any discounted rights price look imho ridiculous if LSB wishes to be taken seriously.

Therefore I expect any fundraising to be linked to a consolidation - I don't know what form this will take, but I expect it and I was careful in my post to clearly state everything was "imho" using "guesstimates"

You example BB. - imho I think comparing LSB problems to the Bradford & Bingley is ambitious, more realistically imho is PAG or CTT (Cattles) which operates in the same lending sector. The CTT rights were priced 41% below the share price at the time of announcement. PAG the discount was deeper.

I use 25/1 as it subsequently prices any rights at a meaningful level going forward, however it could easily be 10/1 or 15/1 etc etc - My main point is I expect a consolidation and imho it will come on the back of the interims which will charge further impairments and contain significant restructuring news.

DYOR

[ihavenoclue] 04/6/2008 16:43

Davius ... completely agree with you ... grlz's version of events were complete rubbish IMHO

[ihavenoclue] 04/6/2008 16:39

A very good point has been made on another thread ... how much of the £32.5 million shortfall is the responsibility of LSIF and no longer LSB's responsibility.

[ihavenoclue] 04/6/2008 16:16

grlz .. so you think if they do a 1 for 25 share consolidation which will be 265p at todays finishing price they would then do a right issue at 80p ?? Even BB. who's price has plummeted way below original offer price only lowered it to 18% below the share price on the day ... there is NO WAY LSB would need to offer a rights issue at a 70% discount to the consolidated share price when the rights issue itself will see the company through to becoming Robinson Way .. which on it's own is valued approx 4 times the value of the current market cap.

You are just scaremongering ... I never said they day before but they are not going to push ahead with consolidation and then a right issue early July with the share price so low

[grlz] 04/6/2008 14:35

ihnc - new management may want to bring on the changes and when did anyone care about PIs

imho I can't see them waiting the day before expiry before doing it given they need to hold an EGM etc. The interims is the date I would use.

DYOR