Bridging loan for share purchase and immediate Sale?

lobs123

[FONT=&quot]Hi,[/FONT]

[FONT=&quot]I'm in need of some advice [/FONT]
[FONT=&quot]I have option shares and want to exercise my holding by purchasing and then immediately selling my shares.[/FONT]

[FONT=&quot]My holding is worth £170k at exercise rate and i could sell the entire holding for approx. £270k within a matter of days of the initial purchase.[/FONT]

[FONT=&quot]I don’t have £170k to purchase the shares before i can sell them. I appreciate bridging loans are usually secured with legal charges against physical assets such as property but would a bank offer such a loan in these circumstances?[/FONT]

[FONT=&quot]Thanks in advance.[/FONT]

bris

No chance.

lobs123

Break it to me gently:D


Seriously though - appreciate the response...assumed that might be the case but my broker suggested it might be a possibility.


Thanks again

Brock_and_Roll

Why could you not sell the shares the same day you bought them?

Is it a public company? Liquid stock? eg FT100 or FT250?

jonesMUFCforever

I agree buy and sell the same day - no upfront costs.

BrassicWoman

why not sell the options?

lobs123

[FONT=&quot]Hi,[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Thanks for all the replies - appreciate the help.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Originally i was told that the purchase of the options and the subsequent sale could happen at the same time - resulting in me not having to front up the money to initially buy them as the trades are virtually instantaneous.[/FONT]
[FONT=&quot]However, upon discussion with my broker this seems unlikely. It appears I would need to provide the purchase money for the options before the sale (2+2 sale?!?) - hence the bridging loan suggestion from the broker.[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]Furthermore the rules surrounding the option scheme seem to suggest that the exercise of the options could take 30 days from provision of the funds. Clearly if this is indeed the case i would again need the purchase money to exercise my options before i could think about selling them on.
[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]I also cannot sell / transfer my options either according to my option form.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Problem is i don't really have a clue about any of this and i can’t talk to my employer who gave me the options as its not in their interest to see these options realised so their advice hasn't exactly been accurate – (for example I was told I couldn’t exercise part of my holding it had to be the full amount – which is incorrect).[/FONT]

lobs123

The holding is in a plc.

Brock_and_Roll

OP,

You absolutely need to get help here - as you correctly identify, the employer does not really have much incentive here!

Do you have any rich friends who might want to earn a quick £10k or so for short bit of risk in a Plc?

lobs123

Hi,


Yes absolutley agree - i'm off to see a lawyer next week and i have a broker looking into the group share documents to try and decifer what i can and cannot do.


All very confusing - almost wish i wasn't given them in the first place as they have caused untold grief.


Thank you again for your help and advice.

AnotherJoe

Can you do it in tranches?
Each tranche will release more capital meaning you can release more in the second tranche.
Since you are getting circa 60% return each time then it would only take about 3 tranches to clear it if you could start with say £30k or so and even £10k would only take 5.


Also i dont know your tax position but it might be advantageous to split the gain over a couple of tax years ?