Shares- Hbos

chrissiewants2save

Help- to understand and any opinions?
I am a customer who was 'given' shares when Halifax Buidling Society went PLC. So.. not an expert and maybe should have sold them last year considering todays price.

Can anyone explain in Plain English what they are proposing (briefly set out below)?

1. To increase the companies authorised share captal and authorise the allotment of shares.
a) will i have to buy more shares? b) will the issue devalue my current shares
2. To disapply pre-emption rights?
a) what are pre-emption rights?, b) do they have the right to buy back my shares?
3. The Capitalisation Issue. To increase the Company authorised share capital, to capitalise reserves and to give the directors the authority to allot ordinary shares in lieu of dividend. (i understand the last part)
a) surely the first part is a repeat of this resolution is a repeat of the 1rst resolution?
Any opinions on these resolutions would be helpful.

Thank you

esbo

chrissiewants2save wrote: »

b) do they have the right to buy back my shares?

They don't want to buy your shares they want to sell you new ones they have invented

Or rather the chance to stump up more money for something you already own

The way I read it is "We need more money to stay in business".
To which you might ask, "What happened to the money you already had??"
Remember these are the people who robbed the Farepak savers.

Wig

chrissiewants2save wrote: »

1. To increase the companies authorised share captal and authorise the allotment of shares.
a) will i have to buy more shares? b) will the issue devalue my current shares
a) No, but if they do a rights issue, your existing shares will lose value, hence if you want to retain the same amount of "holding" you need to buy more shares.
b) see a)

2. To disapply pre-emption rights?
a) what are pre-emption rights?, b) do they have the right to buy back my shares?
Dunno sorry.

3. The Capitalisation Issue. To increase the Company authorised share capital, to capitalise reserves and to give the directors the authority to allot ordinary shares in lieu of dividend. (i understand the last part)
a) surely the first part is a repeat of this resolution is a repeat of the 1rst resolution?
Any opinions on these resolutions would be helpful.

It is similar, the rights issue will create 2.5 billion shares, the resolution 3 will create 0.4 billion shares irrespective of resolution 1. I'm not sure if all the previous dividend share payouts (lieu of cash) created shares in the same way or not. More shares = less value per share.

If I get around to it, I will be voting "NO" to any rights issue. Especially as the price is only going to be £2.75 per share, which is very close to what they are valued this week. So there is no bargain.

chrissiewants2save

Thanks for your helpful reply. Need I say more. x:beer:

Wig

Helpful yes, but I was slightly incorrect, I said res 3. did not create new shares, if you read above, I have edited my answer accordingly. Vote against Res 1, 2, & 3. I have done so online.