National Grid Share Discussion Threads

[viscount1] 27/5/2024 19:08

Funny article about how NG's bankers have made out like bandits from the rights issue:

[bountyhunter] 27/5/2024 18:40

Yes, them and the bankers are the only people who will be rejoicing. Oh, and management for the reasons that Uty explained earlier.

[pander45] 27/5/2024 18:35

Yeah whoever sweeps those up will be licking their lips on anticipation. Killing.

[freedomexpress747] 27/5/2024 18:31

What does the stream here think about a surplus number of shares from non rights takers? Must end up in market some how?

[tsm58] 27/5/2024 18:22

Hi Info from EQI.If you would like to accept the offer, please elect online where available or else notify us by secure message or telephone no
later than 5pm on 03 Jun 2024.
The amount of Rights taken up will be your Rights balance as at 03 Jun 2024 unless you advise us that you would like to take up a lesser amount.
The total cost will be collected from your account. Please ensure you have sufficient cleared funds available to cover the
amount due by the deadline date of 03 Jun 2024.

[laurence llewelyn binliner] 27/5/2024 18:18

Rights decisions by the 06th, monies cleared and present at the date of selection for payment expected to be drawn by 10th with Smart Investor..

[bountyhunter] 27/5/2024 18:17

Have you read the top of the header?

[gilesy911] 27/5/2024 17:59

I'm not sure but I hope somebody on here can tell :)

[bountyhunter] 27/5/2024 17:46

All at the top of the header but the exact payment date will depend on your broker for shares held in a nominee account.

[zeppo] 27/5/2024 17:42

When has payment to be made by to take up the nil paid Rights?

Do we know yet?

[bountyhunter] 27/5/2024 17:03

70bn, 60bn, still a huge amount of money (in total) compared to the current market cap of 33bn. I'll leave Pierre to say what he may have meant but the issue is that investors have suddenly being tapped for a large initial contribution to the NZ investment plan unexpectedly just to maintain the level of dividend income they received previously.

[dr biotech] 27/5/2024 16:34

Read the RNS

Investment is 60bn over 5 years. Not sure where 70bn came from.

Last year they invested 8.2bn as a "typical year". The 5 years before it was a totalling in the low 30s(typically 6-7bn a year) hence "Doubling the investment in infrastructure etc.

Rights issue is 7bn leaving about 12bn to find over the next five years - disposals, increased revenue etc. All the stuff about huge increase in bills is largely guff. Its not a sudden £60bn investment, its £18bn in additional spending over 5 years. Not insignificant of course, but only about half of Hinkley C.

The 60bn is just a spun headline to make it look like a huge new investment to avoid a water company style PR disaster about not investing in infrastructure.

[berny3] 27/5/2024 16:06

I remain positive - think it is prudent of the board to come to the markets to raise this capital to invest in the future of the company and provided ongoing returns for shareholders.

[bountyhunter] 27/5/2024 16:03

Pierre is one of the most informed investors here as Uty has also said, his posts are always worth reading. I'm not quite sure how the post above is angled.

[pander45] 27/5/2024 15:59

Spot on this.

[dr biotech] 27/5/2024 15:55

This is just cobblers. You have zero understanding of finance.

Its an 60Bn investment, not 70bn. In FY24 NG invested 8.2bn in infrastructure. So assuming that level would be ongoing over the next five years that would be 41bn. Plus the 7bn from the rights issue would leave £12bn of additional financing. Whether thats debt or increased revenue from existing assets etc I'm not sure.



Pierre Oreilly27 May '24 - 15:36 - 9190 of 9192
0 0 0
alba - I don't know where your statement about what the se is for comes from.

Of the £70b quid needed, less than £8b comes from shareholders, with 62b from additional debt.

[talldarkslim] 27/5/2024 15:37

Price is up in Germany today

[gilesy911] 27/5/2024 15:13

When do I need to sell my NGPN shares? Is it 12 June??

[pierre oreilly] 27/5/2024 14:36

alba - I don't know where your statement about what the se is for comes from.

Of the £70b quid needed, less than £8b comes from shareholders, with 62b from additional debt.

So in this case, the equity raise is relatively minimal compared to the total, making your 'point' moot.

(As an aside, your view of what the se is for is incorrect strictly speaking. The exchange is for buying and selling shares. It's the concept of shares themselves which raises money for investments, and shares existed well before any exchange for them. Companies can issue paper (i.e. shares) and sell to investors directly to raise capital without going through an exchange. And don't we know it. A se can simplify cash raising for companies, but it's the issue of shares which raises the cash, not the se as you said.

[pierre oreilly] 27/5/2024 14:31

alba, the rights has nothing at all to do with the perfectly normal infrastructure expansion and maintenance ng. has always undertaken. It's for a massive infrastructure build ON TOP of the normal expansion and maintenance. Even large infrastructure projects (like the n-s bootstraps) come under normal annual budgets. The rights are (partly) for a mega mega one-off infrastructure build for net zero, although about 1b will be used to refund a maturing debt, and half goes to the States.

Your example of a data centre in London has nothing to do with ngc but with the regional low voltage network distributer.

[albajack] 27/5/2024 14:27

The original purpose of the stock exchange was to raise equity for investment purposes.

This seems to be lost on a good many posters on here.

[bountyhunter] 27/5/2024 14:08

Yawn. As an income investor taking up the rights issue means forking out a significant amount of cash (like making a zero interest loan which may never be repaid, never mind the lost interest on that capital) just to keep total dividend income the same (as Uty and Pierre have both highlighted). That is the bottom line. That is why most existing investors are not happy about this

[albajack] 27/5/2024 14:06

@utyinv:

If 'z' is being calculated from 'x' and 'y', and then 'z' and 'y' are being combined in a reverse calculation, the result is 'x'.

It does not matter how experiened an investor might be, or whether the calculation is performed by an administrator, the result is exactly the same as the original number. There is no value to be discovered from the process:

10 / 2 = 5

10 / 5 = 2

I'll repeat, but rephrase: calculating value on an *unknown* shareprice at some point in the future is a wholly different set of questions and statements - and likely answers.



I am retired, have also been investing for a good many years, and am aware of different situations regarding rights issues, having been in them myself (*Segro). One situation, which I have not seen mentioned on here, is how to account for lost income when selling a holding and trying to guage a re-entry price.

If the share price goes XD and falls below the perceived valuation price, does this trigger a purchase? This is less of an issue with NG's forthcoming final dividend as the investor already has the dividend in the bag if the share is sold before the XD date. However, if shares are not repurchased before the subsequent dividend, i.e. the next interim, how is that to be incorporated into a valuation point calculation?

Once the opportunity to take that dividend has passed, the investor suffers a permenant loss of income - and this is also something which should matter to an income investor. Leave it too long before buying back in and the loss of further dividends can lower the valuation price required to recover accumulated cuts to income to an unrealistic level. If the investor wants income from this security then there will come a time when the shares will have to be bought even if they are above the preceived valuation price. This is one of my own experiences. It is a similar problem to trying to time markets.


Something else that I have not seen mentioned on here is how raising debt instead of equity can lead to a cut to the dividend. Interest payments have priority and have the potential to reduce cash available to pay dividends. NG's dividend cover is already low - last number which I have from ShareCast is 1.2. NG's credit ratings are also towards the low end of investment grade. Take on more debt and the risk is of being downgraded to junk territory. If this happens then coupons on subsequent debt will be higher - and this will matter a good deal once existing investment-grade bonds with lower coupons need to be refinanced. And there is the ongoing problem of how to refinance the debt just raised when that matures - another round of replacement debt?

There does come a time when raising finance as equity rather than as debt is sensible - and safer. A current example of how debt can truly destroy shareholder value is Thames Water. Instead of putting new equity into the company, shareholders preferred to have new finance raised as debt. Now they are very likely to be wiped out.



...and...on an entirely tongue-in-cheek note...

New infrastructure is needed not just because of the Green Transition. New infrastructure is needed whether the electricity is green or grey. The area around west London, alone, is struggling to build new housing because of contraints on the electricity supply infrastructure. These contstraints are due to the number of data storage warehouses in the area (greater Dublin has a similar problem, just FYI).

These centres require air conditioning to keep the environment cool enough for the servers that they house. As the number of servers increase there comes a time when a new air-conditioned building has to be built to house them.

These servers store internet-generated data. Some of this data is social media, e.g. Meta, X, etc. Some is from sites such as - ADVFN.

As more posts are made on ADVFN, more server space is required to store them. Eventually, a new server required, leading to...a ripple up the chain.

Therefore, every post being made on ADVFN which is criticising the NG. rights issue is doing a little bit more to speed up the need to upgrade the very infrastructure upon which their published criticisms are reliant... :-)

Do try to read it in good humour, please - it's a Bank Holiday...!



*Segro: being my most previous situation of a capital raise prior to NG.. Not enough cash on hand to fully subscribe to my entitlement. Took up what I could. Subsequently topped up when sufficient funds had accumulated. My situation now is different, having just sold something before the RI announcment with the intention of reinvesting elsewhere. Instead, these funds will go towards NG. and the other will have to wait. Two identical requiremens, two different situations, both managed accordingly.

[bountyhunter] 27/5/2024 14:06

I looked at in Nexans earlier today but my broker's FX charges on buy and sell plus the FX spread put me off. Ideally there would've an equivalent on the UK market but I haven't found one. Not so bad if you are investing with a long timeframe in mind of course.