RBS Rights Issue

The_doomed

Ive an online sharedealing account with Halifax and hold RBS shares, nothing listed in Corporate Actions section. Should I be concerned?

debbie42

I'm in the same position, and do have a corporate action about the rights issue, which was received 24/04/08. I can forwards it to you, if you want? No action needed at the moment, but I'd query the Halifax as to why you don't have notice of it.

TBM_3

Hi - I hold RBS with an on line dealer and have received corporate action today - voting required for resolutions by 8 May.

The_doomed

sent you a pm debbie, thanks folks

royeee

I understand that the timeframe for buying the RBS rights issue entitlement is very short and which the end date will be around early-mid June. My full entitlement will be approx £7k. As I won't have the cash until August, if I want to take this entitlement up I need to find the money from elsewhere. I could withdraw from my cash ISA (and lose future interest) or get short term loan (if repay in 2 months is permissible).

Does anyone have any suggestions?

purch

Does anyone have any suggestions?

Pop into your local NatWest and ask for an interest free loan ?? :eek:

royeee

purch wrote: »

Pop into your local NatWest and ask for an interest free loan ?? :eek:

Hmm, I've never known banks to give interest-free loans.

earlgrey_3

royeee wrote: »

I understand that the timeframe for buying the RBS rights issue entitlement is very short and which the end date will be around early-mid June. My full entitlement will be approx £7k. As I won't have the cash until August, if I want to take this entitlement up I need to find the money from elsewhere. I could withdraw from my cash ISA (and lose future interest) or get short term loan (if repay in 2 months is permissible).

Does anyone have any suggestions?

Royee, I've got 3200 RBS shares (about £11K) on which I'm still thankfully sitting on a very good profit over what I paid. As at the present, I'm almost certain to take up the rights but no way would I borrow money to do it. Can I ask why you're so positive?

If you withdraw from your cash ISA it's not so much the future interest I'd worry about but you'd lose that bit of your tax-free hidey-hole for cash for ever. I'd sell some RBS or other shares or sell some RBS rights if necessary.

royeee

earlgrey, thanks for your comments. Its not so much about being so positive, more to do with forward planning that is if I go for the rights issue I'm sounding out what's the best option to get the funding if not having the cash now but have it in 3 months. The other concern is if you don't go for the rights issues then the current holdings will get diluted.

earlgrey_3

When you say "diluted", it's true that if you don't take up the rights that your holding in the company will be reduced with dilution of the share value but that's all. If you don't take up the rights or sell them yourself then the company will normally do that for you and return the money it gets for them to you - so the value of your holding becomes less by that amount.

It's really a case of whether you want to increase your investment in the company which is what you'll be doing if you take up the rights. You need to decide whether RBS is a company you want to increase your investment in or whether you'd be better putting the money into another company.

The share-price should be around the 290p mark after the rights issue ignoring other factors. In my case I'll have either increased my stake by about £4K if I take up the rights or reduced it by about £1.5K if I take the cash for them.

If you want to keep your investment the same you can sell some !!!-rights shares now (the word bleeped out was c u m-rights ), sell some rights, or take up the rights then sell some shares later - whichever is most cost effective. Personally, I would never borrow to take up a rights issue.

royeee

earlgrey, that is very balanced way of putting and very clear, thanks.