Rolls-royce Share Discussion Threads

[bingaxu] 27/10/2020 16:10

Ex rights tomorrow. Shareholders in Rolls-Royce (RR.) are being asked if they want to back a £2 billion rights issue aimed at securing the company's future.The rights issue is fully underwritten by a panel of investment banks, meaning Rolls-Royce is guaranteed to get the full amount even if shareholders don't take up all the new shares.The engineer is also issuing a further £1 billion worth of debt, has agreed a new two-year loan facility of £1 billion (contingent on the success of the rights issue); and received a guarantee from the UK Export Finance agency on a further £1 billion loan.WHY IS ROLLS-ROYCE ACTING NOW?Disruption to the aviation sector is having a significant impact on demand for the aircraft engines Rolls-Royce makes and sells.The company expects to see a cash outflow of £4 billion in 2020 and about £3.2 billion worth of debt is due to be repaid in 2021.The importance of the long-term servicing and maintenance agreements associated with these engines means the reduction in the number sold now could affect the business for years into the future even if or when the airline industry recovers.WHAT ARE SHAREHOLDERS' OPTIONS?Shareholders have four main options. The first option is that they can exercise the right to buy new shares at 32p – this a 10-for-three issue meaning shareholders can buy 10 new shares for every three they already own.The second option for shareholders is to sell their rights to someone else in return for cash, without having to sell their existing shares. The amount a shareholder will receive for their rights will depend on what people are willing to pay for them.The rights issue price of 32p represents a 41.4% discount to the theoretical ex-rights price of 54.6p per existing share by reference to the closing price of 130p on 30 September 2020. The theoretical ex-rights price is the implied market price once all the new shares are issued.The third option is to sell some of the rights and potentially use the proceeds to buy some of the discounted shares.The fourth option is to do nothing. In this situation, shareholders' rights are expected to be sold in the market at the best available price by Rolls-Royce and the proceeds returned to shareholders via their investment platform provider minus any charges.WHAT HAPPENS NEXT?A shareholder vote to approve the rights issue will be held on 27 October. Investors will receive their nil paid rights on the 'ex rights date' of 28 October providing they haven't sold their holding before that date.The period in which to exercise or sell the rights is expected to run from then until 11 November although the deadline is likely to be 6 November for many investment platforms. This is expected to be confirmed soon. The new fully paid shares will be credited to accounts on or around 12 November.WHERE DOES THIS LEAVE THE COMPANY?Once the rights issue and rest of the recapitalisation process is complete the company should, on its own assessment, be able to weather macro-economic risks through to 2022 when it expects to return to strong cash generation.Investment bank Jefferies earlier this year noted: 'We don't envisage airlines placing large orders for new aircraft before 2024 or Airbus and Boeing launching new aircraft programmes before the end of 2025.'The duration of the pandemic and the restrictions on air travel associated with it remain highly uncertain.Rolls-Royce itself has noted that total maintenance demand is now expected to be up to 10% to 15% lower in 2022 than previously expected. It is taking steps to adapt to lower demand by reducing the size of its civil aerospace business and pivoting towards its defence and power systems operations. It also plans to sell its ITP Aero aero-engine subsystem design arm.Pre-Covid-19, the engineer was having to deal with faults on its Trent 1000 engines. This situation had escalated from what was initially characterised as a relatively minor issue to one that was expected to cost upwards of £1.5 billion to fix.

[careful] 27/10/2020 15:48

Whats this about Singapore?
RR have facilities in Singapore already.

Nearly all of the RR corporate and technical know how is in the uk.

This 'aint Starbucks.

[bingaxu] 27/10/2020 15:28

Hi Typi56, how does this rights work? If I bought this share a few weeks back, will I have any rights? Many thanks.

[john of groats] 27/10/2020 13:30

Myrmatt,

If there goes on strike and moves to Singapore, we will need to find a new word for that place.

John

[demo trader] 27/10/2020 13:27

Last day of normal dealing :). Was thinking why it went up this morning, falling now a little, may be some don't want to get involved with Rights.

HOD......235p+
LOD.......219p-

[careful] 27/10/2020 12:26

are we ex rights tomorrow?

[buywell3] 26/10/2020 20:12

Top of the trading channel looks to have been hit

Yanks are controlling the direction now thinks buywell

A drop in the USA from today in the absence of any new stimulus eg DOW to 25,400 will hurt all world markets BUT deflate the present unsustainable bubble somewhat as the FTSE 100 tests 5,000 as Covid-19 cases continue to rise everywhere except China and a few other countries that have treated Covid-19 as the killer it has become and the bigger killer it will become yet.

[datait] 26/10/2020 19:56

shorts will take this well below £1

You watch

[josh 32] 26/10/2020 17:47

Shorts reduced again ??

[younasm] 26/10/2020 16:31

Thanks - good summary of timetable.Ex-rights trading starts on 28th Oct.I will adjust my positions tomorrow.

[typo56] 26/10/2020 15:39

If you don't want to take up your rights you can sell them or let them lapse. In terms of the currrent with rights RR. price of 240p, selling the rights would give you back about 160p (48p per rights). You need to factor that in if you decide to take up the rights - they do not just cost you 32p.

[demo trader] 26/10/2020 13:17

23rd was a Record Date.

XR- Last date to sell 27th October if you don't wants XR Price

On 28th (Normal share price which is around 238p will be adjusted on 28th) and rights to trade till 5th Nov.

If paid then shares in your account on 25th Nov.

IMO

[sbs] 26/10/2020 12:43

Yes - shares bought tomorrow should include rights. Shares bought / sold on Wednesday will not.The clue will be in the share price!

[gunsofmarscapone] 26/10/2020 11:26

Correct myself, as someone posted recently the rec date only applies to cert holders. On a positive note the TERP at 239p is 79.76.

My estimate a week ago 85.3, 13.5 trading hours to go. The institutions will mostly have taken up their full holdings by now, room for a few more PI’s if happy with today and tomorrow’s price.

[myself01] 26/10/2020 10:08

I think the date by which one has to have RR shares to be entitled for rights issue is end of 27th i.e. tomorrow

[1me me] 26/10/2020 10:02

Day traders

[typo56] 26/10/2020 09:48

If you had to be in by 23rd why is anyone paying 240p when they won't receive the rights? Without benefit of the rights it would be trading at about 80p.

Using 'record date' is such a novice error!

[datait] 26/10/2020 09:21

We shall see.

[datait] 26/10/2020 09:17

You had to be in by 23rd to get the shares at 32p so its going down. This will be shorted big time.

Many will be spiked at this price.

[svenice7] 26/10/2020 09:03

Good point , with placing at 32p

[datait] 26/10/2020 08:40

This will be shorted from here big time.

[robbo 44] 25/10/2020 08:13

At last! NHS workers are 'set to get a vaccine in weeks' as the Government accelerates timetable for a mass roll-out before Christmas - while ministers introduce new laws to bypass EU approval for jabPlans are being drawn up for frontline NHS staff to receive a coronavirus vaccine within weeks, as the Government moves to accelerate the timetable for a mass roll-out.An email sent by an NHS Trust chief to his staff, seen by The Mail on Sunday, reveals the Health Service is preparing for a national vaccination programme before Christmas. can also be disclosed that the Government has introduced new laws that would allow the UK to bypass the EU approval process if a safe and effective jab is ready before the end of the post-Brexit transition period on December 31.move will boost optimism that a 'game-changing' vaccine will soon allow Boris Johnson to relax the social restrictions which have crippled the country since March.