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National grid shares help

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  • MACKEM99
    MACKEM99 Posts: 1,058 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    wmb194 said:
    MACKEM99 said:
    Sorry to be a pest if I decide to take up the rights how will I pay.  Mine are all on line, not received the paper version yet?

    How do you hold them? If it's with a stockbroker you deposit the money with the stockbroker and tell it that you want to take up your rights. Usually there's a 'corporate actions' section of their website or you send a secure message.
    i have just seen it on the info - pay by debit card.  Thanks for all the help.  :
  • National Grid want some money to invest in new infrastructure. They have decided to raise some of it from existing shareholders, if they are willing to invest more.

    They have allocated you some new "nil-paid" shares - 7 / 24 times the number of regular shares you hold. By the end of next week or so, you should decide what you want to do with them. Your options are:

    Pay £6.45 per nil-paid share, and they will get converted to being like the regular shares, giving you dividends (not the one due in July, but they will after that).

    Do nothing, and they will sell the shares to companies that do want them and will pay the £6.45 (the companies have already agreed to buy them if they're available), and give you the proceeds when it's all been worked out.

    Or you could sell the nil-paid shares in the next week or so in the stock market, and then the buyer gets the choice of paying the £6.45 or letting the companies do that. This would mean you pay a trading fee.

    You can mix these options up; rather than paying the £6.45 (ie increasing your investment), or letting the nil-paid shares get sold, and getting a bit of money a few weeks later (ie decreasing your investment), some people will sell enough to be able to pay the £6.45 for  the rest of the nil-paid shares (this has become known as "swallowing your own tail") - this keeps the net amount you had invested level. If you don't have the cash available for paying the £6.45 for some of the shares, then you'd need to sell the others in the stock market now to get it.

    Do you hold your National Grid shares as paper certificates? If so, National Grid should send you forms and a lot of background material on what you can do. If you hold them on a platform (perhaps in an ISA or SIPP), the platform should tell you how to tell them what your decision is - log onto the platform.
    Thank you for this explanation, could I just check that I’m understanding you correctly, when you say mix these options up is this the cashless take up option?
  • Application forms on their site is unreadable. They have issued reference numbers and allotment numbers but not advised of this. Where can we get one?
  • EthicsGradient
    EthicsGradient Posts: 1,246 Forumite
    Sixth Anniversary 1,000 Posts Photogenic Name Dropper
    National Grid want some money to invest in new infrastructure. They have decided to raise some of it from existing shareholders, if they are willing to invest more.

    They have allocated you some new "nil-paid" shares - 7 / 24 times the number of regular shares you hold. By the end of next week or so, you should decide what you want to do with them. Your options are:

    Pay £6.45 per nil-paid share, and they will get converted to being like the regular shares, giving you dividends (not the one due in July, but they will after that).

    Do nothing, and they will sell the shares to companies that do want them and will pay the £6.45 (the companies have already agreed to buy them if they're available), and give you the proceeds when it's all been worked out.

    Or you could sell the nil-paid shares in the next week or so in the stock market, and then the buyer gets the choice of paying the £6.45 or letting the companies do that. This would mean you pay a trading fee.

    You can mix these options up; rather than paying the £6.45 (ie increasing your investment), or letting the nil-paid shares get sold, and getting a bit of money a few weeks later (ie decreasing your investment), some people will sell enough to be able to pay the £6.45 for  the rest of the nil-paid shares (this has become known as "swallowing your own tail") - this keeps the net amount you had invested level. If you don't have the cash available for paying the £6.45 for some of the shares, then you'd need to sell the others in the stock market now to get it.

    Do you hold your National Grid shares as paper certificates? If so, National Grid should send you forms and a lot of background material on what you can do. If you hold them on a platform (perhaps in an ISA or SIPP), the platform should tell you how to tell them what your decision is - log onto the platform.
    Thank you for this explanation, could I just check that I’m understanding you correctly, when you say mix these options up is this the cashless take up option?
    Yes, "cashless take up" is the term National Grid use for it in their documentation. 
  • wmb194
    wmb194 Posts: 4,890 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    shararat said:
    Application forms on their site is unreadable. They have issued reference numbers and allotment numbers but not advised of this. Where can we get one?
    Where are you looking? Define, "their."
  • MACKEM99
    MACKEM99 Posts: 1,058 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    shararat said:
    Application forms on their site is unreadable. They have issued reference numbers and allotment numbers but not advised of this. Where can we get one?
    Mine came by email.
  • National Grid want some money to invest in new infrastructure. They have decided to raise some of it from existing shareholders, if they are willing to invest more.

    They have allocated you some new "nil-paid" shares - 7 / 24 times the number of regular shares you hold. By the end of next week or so, you should decide what you want to do with them. Your options are:

    Pay £6.45 per nil-paid share, and they will get converted to being like the regular shares, giving you dividends (not the one due in July, but they will after that).

    Do nothing, and they will sell the shares to companies that do want them and will pay the £6.45 (the companies have already agreed to buy them if they're available), and give you the proceeds when it's all been worked out.

    Or you could sell the nil-paid shares in the next week or so in the stock market, and then the buyer gets the choice of paying the £6.45 or letting the companies do that. This would mean you pay a trading fee.

    You can mix these options up; rather than paying the £6.45 (ie increasing your investment), or letting the nil-paid shares get sold, and getting a bit of money a few weeks later (ie decreasing your investment), some people will sell enough to be able to pay the £6.45 for  the rest of the nil-paid shares (this has become known as "swallowing your own tail") - this keeps the net amount you had invested level. If you don't have the cash available for paying the £6.45 for some of the shares, then you'd need to sell the others in the stock market now to get it.

    Do you hold your National Grid shares as paper certificates? If so, National Grid should send you forms and a lot of background material on what you can do. If you hold them on a platform (perhaps in an ISA or SIPP), the platform should tell you how to tell them what your decision is - log onto the platform.
    Thank you for this explanation, could I just check that I’m understanding you correctly, when you say mix these options up is this the cashless take up option?
    Yes, "cashless take up" is the term National Grid use for it in their documentation. 
    Thank you very much for your help 

  • I've read the posts on here but am still a bit confused. My husband now has Dementia so can't help me sadly. We have 140 shares and they are asking for £285 to get these new rights thingies. We don't really have this type of money to waste but by not buying them will I lose out on a lot of money? If I do nothing will I lose the existing shares or lose money? Am really confused by all this and don't understand the jargon it's written in. I've looked up the price and I think it means today the existing are worth about £1,200 if I'm correct. Should I try to sell them? Apparently I only have to the 31st to sort this out and I am caring for my husband who is very ill with both physical and mental issues and I'm terrified of doing the wrong thing. Any help would be greatly appreciated thank you 
  • EthicsGradient
    EthicsGradient Posts: 1,246 Forumite
    Sixth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 29 May 2024 at 2:42PM
    No, you won't lose much money if you do nothing.

    In addition to the 140 shares you already had, they have assigned you 140 * 7 / 24 = 40 "nil-paid shares". These give you the opportunity to pay £6.45 per nil-paid share (£258 in total, not £285, I think) to convert them to fully-paid shares, like the ones you already have (and which would be worth about £8.13, on today's market). But you should only pay that if you want to invest more in National Grid, and have the cash available - which you don't.

    If you do nothing, then around the 12th June, they will sell those nil-paid shares for you - they currently trade for about £1.68, because that's £8.13 minus £6.45. So you'll get sent some money (probably a cheque, if you hold paper certificates; if you hold the shares on a platform (eg in an ISA or SIPP) they'll credit your account). This will be a reasonable deal. The market price of both the existing and nil-paid shares may vary between now and 12th June, so you can't say exactly how much you'll get if you wait (could be more, could be less - that's the nature of markets) - if the price stayed the same, it ought to be £1.68 x 40 = £67.20.

    After that, the future dividends you'll get from National Grid will be a bit less than before.

    You could sell all your shares, both the old and the nil-paid shares, in the market now.  But that will mean paying some dealing costs. 

    You may have been given the "cashless take up"  or "tail-swallowing" option mentioned above. If, in whatever documentation you have, printed or online, you find that as an option offered, it might be a good option for you - it means you don't have to contribute any extra cash, but neither will they send you much money - they'll balance selling some shares and paying the £6.45 for the remainder to keep how much your investment is worth roughly level.
  • C212
    C212 Posts: 3 Newbie
    First Post
    The option I have selected is to sell the NGNP right and use the money to take up some of the rights issue (at £6.45 per share), i.e. the "tail swallowing" option.

    At the end of the exercise I will have an additional ~900 National Grid shares. 

    When filling out my annual tax return:

    A)   Do I put the £5,805 (900 x £6.45) as dividends
    B)   Do I treat the £5,805 as a gain (and pay CGT on the amount over the £3,000 limit).
    C)   Do nothing until I sell the shares (and then pay CGT as due at the time).

    Reading the HMRC guides, I think it might be option B but it isn't completely clear, so any advise would be gratefully received.
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