Please explain for a total dummy

hethmar

In February I had a letter from Polar Cap Technology Trust along with a certificate of 222 redeemable subscription shares of 1p each. (Question 1, I dont even know what that means)

Anyway, I rang the registrars who said that as I had shares in Polar Cap I would be entitled to buy new shares at a favourable price? But that the price wouldnt be known til end of March so I couldnt do anything now anyway.

Well, March came and went and I just thought about this and rang them again. The chap I spoke to said it was too late to subscribe as the money should have been there today for the first lot of shares. Well, apart from the fact that I hadnt received any notification of that - he told me the shares are 401p each. NOW, the shares are currently trading at 370p each on the stock market.

I said to him that surely it wouldnt be sensible to buy them at 31p more than they can be bought normally but he just kept saying subscription shares arent the ones on the stock market, they are completely different?

I still dont understand any of this. Can someone explain REALLY simply for me please.:o

TrickyDicky101

Hi

Redeemble shares makes it sound like they are preference shares that pay a fixed dividend over the life of the share (and the share will have a redemption date sometime in the future) ie very much like a bond rather than an actual share (because the repayment profile is different from an ordinary share, the price will be different). I don't know if this is definitely the case though I'm afraid as I would need to see the specific details of the issue.

sorcerer

Sound dodgy to me, in Feb the shares were worth £3.90 to £3.60 each, why would they give you shares at 1p.

TrickyDicky101

I think that 1p is the nominal value of the shares, not the subscription price. Need to take into account what the redemption terms of the shares are though - if you only get back nominal then that would be a pile of cr*p (depending on price paid of course).

jimjames

If they are subscription shares then they may not be worth buying if the sub price plus share price is higher than the current share value. In this instance it appears that they would not be worth buying as you have seen. In other situations they may be.