London Scottish Bank Share Discussion Threads

[cyclingnut] 02/9/2008 07:48

this from June 30th



Commenting on the results, Peter Cordrey, Chairman of London Scottish Bank plc,
said:

"The Group has made good progress in identifying and implementing its strategy
for the delivery of shareholder value. As announced in February, the Group is
focused on the growth of its successful debt purchase and debt collection
division, Robinson Way, reducing the capital employed in its lending divisions
and, over time, effecting a managed exit from these lending businesses.

Good progress has been made implementing this strategy, with the signing of a
new three year committed revolving credit facility for up to £85.0m to support
the growth of the debt purchase business, the exchange of contracts for the
sale of the Factoring business, the closure of the loss making Loan Broking
business and the start of the integration of the branch networks of the Morses
and London Scottish Finance businesses in order to eliminate duplicated costs.

However, the Group continues to trade at a loss due to the poor performance of
its Unsecured Consumer Credit business and we expect the poor performance to
continue until the restructuring and exit from that business has been effected.

The Group is currently engaged in a process to raise a minimum of £45m of
equity capital and has also commenced discussions with a number of interested
parties, which may or may not lead to an offer for the Group."

[johnspain] 02/9/2008 07:45

Davius
"LSB are in a bid situation"

Have I missed an anouncement? quite likely.
I have been working on the basis that the bid situation was rumour, but a well founded one.

[davius] 02/9/2008 06:48

> Who are Numis?
> Why so many disclosures?



LSB are in a bid situation, therefore all changes in shareholding accross 1% barriers need reporting via RNS.

[m4p] 01/9/2008 21:17

Who are Numis?

Why so many disclosures?

[cyclingnut] 01/9/2008 21:04

just a punter how many shares were bought 600,000....only equates to £42k or so...hardly and institutional purchase...

[m4p] 01/9/2008 20:34

the EPT disclosure today indicates that they are buying on behalf of a client

BUT WHO?

[cyclingnut] 01/9/2008 19:23

my deduction is if you take the chairmans statement of June 30th about being on track to realise value for shareholders....tie that in with the October deadline and you have a few interesting and I would imagine highly profitable weeks ahead of us...

[m4p] 01/9/2008 17:01

Mean

Who can/will buy these divisions?

[meanm] 01/9/2008 16:36

May I remind you all that in the last statement, the board stated that "the disposal of the Factoring business, if approved by shareholders, would
increase the amount of Tier 1 regulatory capital which the Group holds and
reduce the regulatory capital SHORTFALL to (approximately) £7m."

Clearly the sale of either the Mortgage Lending division or of Morses/LSF (which have been integrated) should see LSB being able to make up that £7 million shortfall and, by so doing, meet their regulatory requirements.

However, after saying all of that, the possibility of the sale of the entire business is also strong, as any potential buyer would not want the reduced lending conditions that would be imposed by the banking syndicate if LSB were not to achieve it's regulatory requirement by the 31st of October.

Either way, LSB moves forward considerably in the next 2-4 weeks. Watch for the moves ahead.

[m4p] 01/9/2008 16:25

Thanks MeanM


So in your opinion they can raise the necessary capital without tapping shareholders and retain the jewel in the crown which is R.W?

Sounds very promising if they can acheive this

News will be quite soon as the dead line looms (31/10) and they can hardly leave it until the last minute and this is why the share price is coming to life after weeks in the doldrums

[meanm] 01/9/2008 16:21

With the October 31st deadline looming, I am led to believe that within the next 2-4 weeks major announcements will be forthcoming. There are only small moves happening just now, but LSB can only continue effectively if the board is able to raise the required £32.5 million regulatory capital, by the 31st of October, via divisional sell-offs or through independently raising "£45 million" (rights issue).

Clearly, a rights issue is not going to happen. It was floated a few weeks back and was met with a poor response. However, the selling of the Morses/LSF business, for a nominal fee, or the (profitable) Mortagage Lending division would significantly reduce the required regulatory capital and so the business could possibly prevent the enforced sale, imposed by the syndicate of banks, of RW or the entire business.

[m4p] 01/9/2008 15:50

Lets throw the idea into the mix that an offer may not be for the whole business, or even R.W.!

Could they raise the money they need by selling the other parts of the business & retaining R.W

What will the shares be worth then?

[m4p] 01/9/2008 15:44

any significance in 2 weeks mean?

[meanm] 01/9/2008 15:39

grlz, M4P & Davius

Let us see what the next two weeks bring.

[davius] 01/9/2008 15:34

True, but you can have rumour without substance. Shame we didn't hold on to the gains, but at least there's renewed interest in the shares.

[m4p] 01/9/2008 15:31

no smoke without fire grlz!

[grlz] 01/9/2008 15:13

there is a rumour that they are in talks to sell off the morses/lsc business - expected a statement today although nothing has been released may explain the fall back as it looks like it's just a rumour after all

DYOR

[cyclingnut] 01/9/2008 13:56

Well, the way I see it all the new money that piled in today will be looking for a return at higher levels than here...so not too worried at all.

[m4p] 01/9/2008 13:15

thanks Davius

most appreciated

[davius] 01/9/2008 13:14

It's falling as rapidly as it rose, 6.76-7.35p now.

[davius] 01/9/2008 13:12

An auction occurs when the bid and sell prices match or cross.

Current spread is 7.05-7.7p with a 50K buy order (at 7.05) and 30K sell order (at 7.7p). Suppose someone was really keen to shift say 100K at anything above 7p. They could put in a sell order for 100K at 7p and the shares would go into auction. This usually lasts for 5 minutes and during it other orders can be added to buy or sell side. On completion of the auction buys and sells get matched up and go through as a single 'U' (Uncrossing) trade. That one trade may represent lots of seperate orders though and you'd need to be watching level 2 to see what really went on. Most SETS stocks have an auction both at the opening and closing each day.

The spread is so wide because buyers aren't prepared to let pay more than the current bid (7.05p) and sellers won't let their shares go for less than the current offer (7.7p), there's a reluctance to trade and when few trades are going through the spread tends to widen. You often find it closes either when a large order hits the books (which could be a buy or a sell) or when a market maker gets involved on behalf of a client.



This shot of L2 shows us that apart from a single buy order at 5.81p, all the other buy orders are market makers.

(You'll see from the image that the spread has changed from the 7.05-7.7p when I began the post)

[m4p] 01/9/2008 12:56

Can you explain the auction process please davius?

and why is the spread so wide?