spp, page-9

Hi everyone, I hope everyone had a restful, happy and safe Christmas.

Typing away on a lazy Boxing day and trying to workout how many shares we'll each receive from the SPP. Comments more than welcome.

Shareholder table from page 99 of the last annual:

SIZE OF HOLDING TOTAL HOLDERS UNITS % OF CAPITAL
1-1000 731 413,751 0.40
1001-5000 1,016 2,871,024 2,76
5001-10000 401 3,264,776 3.14
10001-100000 295 8,012,749 7.71
100001-max 40 89,298,700 85.99

TOTAL 2483 103,861,000 100

Guys it's going to be hard to gauge how many will take part in the SPP. I'm roughly assuming that everyone above 5,000 shares will take part in the SPP and half of those under 5,000 shares will take part. I still believe that many of BCI's smaller holders won't be able to raise the funds needed. Although obviously the more punters taking part in the SPP, the less money required by each holder, and therefore the more that will be able to take part in the SPP as less money could be required than first thought.

The other thing that has slightly surprised me was this:

A local buddy was over last night for a game of pool and a couple German ales. I convinced him a while back to have a go at BCI. He brought a few shares and as such is a BCI shareholder. To my surprise when we talked about the BCI SPP, he had no idea that there was going to be a SPP and what that meant. I said to him that he could've sold his shares on the market for around $3.40, to then get them back for $3.04 through the SPP, money for nothin' I said. He replied, "What what what???, what are you taking about?"

In my opinion we on the BCI HC forum take an interest in BCI and on the most part know most of the ins and outs of BCI. But it won't surprise me the amount of holders out there who don't follow BCI and won't even know that there is a SPP about to take place, or even what that may mean. That's why I'm only saying half of those under 5,000 will take part in the SPP. As mentioned, I've assumed everyone over 5,000 shares will take part which won't be the case either. So this really is just a rough guess.

The assumptions:

1,747 under 5K in shares. Divided by 2 = 873 holders.
736 over 5K in shares.
Total holders that will take part in the SPP = 1609

SPP capped at $10,000,000.

$10,000,000 divided by 1,609 = $6,215 (each holder)

$6,215 divided by $3.04(assumed price per share)= 2044 shares.

Guys I hope I'm wrong. I hope (selfishly) that no where near that many holders take part in the SPP. But if I'm even partly right, we may only receive just over 2,000 shares in the SPP. This could also have a flow on effect. That is, many have sold up to 5K of shares on the market in anticipation of then swapping them back for their SPP shares, since the SPP was capped at $15K for each holder and many figured the price of the SPP would be around $3. However if they can only receive 2K of shares through the SPP, most I assume will want to buy back the shortfall of 3K back off the market. So potentially, rather than the SP going down as the SPP shares become tradeable. The SP may instead go up, as holders scramble to try and buy back the shortfall. Perhaps what may happen is that when it's announced that holders may only receive 2K in SPP shares. That's when there will be the mad scramble to buy back the 3K shortfall back off the market.

Also. This maybe wrong, and I'm not bothering to find out if I'm wrong either so forgive me here. But I recall QBE doing a SPP earlier this year. The SPP price was well below the market price so was obviously over subscribed. From memory holders only received one tenth of what they wanted or were hoping for. That's not going to happening with BCI, but more to the point, I believe most QBE holders were disappointed in the amount of shares they were able to eventually grab. This may also happen with BCI holders.