Help with shares

barak

agrinnall wrote: »

Exactly, although my brief read of the document suggests that you'll actually only get 411 shares, and I assume the balance for the 7 original shares will be repaid as cash.

Don't assume that!

"Any shareholding of Existing Ordinary Shares which is not exactly divisible by ten will generate an entitlement to a fraction of a New Ordinary Share. Arrangements will be put in place for any such fractional entitlements arising from the Share Sub-division and Consolidation to be aggregated and sold in the market on your behalf. Based on the share price of 25.96 pence on 12 April 2012 (being the latest practicable date prior to the printing of this Notice) the maximum fractional entitlement will be £2.34. Proceeds of less than £5 will be donated to ShareGift, a UK registered charity. Shareholders will be given the opportunity to write to the company’s Registrar and request that the proceeds of the fractional entitlement relating to their holding be returned to them rather than donated to ShareGift. This request must be received by the Registrar by close of business on 31 August 2012. Proceeds of fractional entitlements in excess of £5 (if any) will be distributed to shareholders on or around 15 June 2012."

So what they are saying is -
[1] Maximum possible fractional entitlement based on price of 25.96p is £2.34 [9 x £0.2596]
[2] Proceeds of less than £5.00 will be donated to Sharegift.

So shareholders with a holding not ending in zero wanting to receive their fractional entitlement must write to the Registrar or all fractional entitlements will be donated to Sharegift - unless, of course, the share price more than doubles to 56p by June. [:rotfl:]

Reaper

agrinnall wrote: »

Can you (or anyone) explain what the purpose of the deferred shares is then? Is it simply an accounting device because the current shares are a nominal 25p and the new ones will be 10p before consolidation, so the deferred shares are 15p to balance the books?

I gather it is just a device. RBS say on the subject [PDF]:

2. What are deferred shares?
The deferred shares have no value and are simply a tool to enable the Group to undertake the share sub-division. The deferred shares will be
surrendered for no value and cancelled by the Group immediately following the sub-division and consolidation

agrinnall

Thanks to Barak and Reaper; I also got the document that they've quoted from in the post today.

Glen_Clark

Just a load of bankers shuffling around old assets instead of creating new ones, and trousering some hefty fees in the process. Same as usual

maciek

Hi, can I just check something as I don't think this has been explained well above.

There's two sentences in the letter from RBS that confuse me.

one:

Each Existing RBS Ordinary GBP0.25 share will be sub-divided into one Pre-Consolidation Ordinary GBP0.10 share and one Deferred GBP0.15 share.
Then, Every ten Pre-Consolidation Ordinary GBP0.10 shares will be consolidated into one New Ordinary GBP1.00 share.

two:

No application is being made for the Deferred shares to be listed on the Official List or admitted to trading on any stock market or securities exchange. These shares have extremely limited rights and benefits attached to them rendering them in effect, economically worthless and will therefore not be updated on to your account.

how does this not mean that I'm loosing .15 of every share I hold?
could someone please explain it a little bit simpler?

sabretoothtigger

You are losing 9/10 of every share, even worse. However if the excess cease to exist and the whole worth and ownership of the company is distributed equally among the remaining shares you do hold; there is zero difference from now

Ifts

Saw this article over at citywire.co.uk on the RBS 10 for 1 stock split:

RBS to beautify itself with 10-for-one stock split

RBS claims its lowly share price is unbecoming of a company of its size, so is proposing a complex and cosmetic 10-for-one share swap.

Read more: http://www.citywire.co.uk/money/rbs-to-beautify-itself-with-10-for-one-stock-split/a584706?re=18840&ea=99895&utm_source=BulkEmail_Money_Weekly&utm_medium=BulkEmail_Money_Weekly&utm_campaign=BulkEmail_Money_Weekly

talexuser

All shareholders should vote against. There is nothing in this for shareholders, but everything in it for the directors who will have difficulty giving themselves large share options under the existing structure, but will find it much much easier under the new structure with all the deferred shares on the balance sheet.

dzug1

The only thing you will lose is up to 9 old shares (a couple of pounds worth) because they round down when dividing by 10 and won't pay out sums of less than £5.

Billy5876

Even though they are the same value, surely they have taken the chance away of earning more profit as i bought in low and wanted to be in ling time. Hoping they would go up 5 times but now a hight share price after consolidation this has now gone