REACH RESOURCES LIMITED (ASX:RR1) - Ann: Consolidation/Split - RR1, page-31 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by GolferQld: ↑

This shareholder thought this information below might be of interest to RR1 shareholders in this forum.
Of course DYOR IMO

----------------------Non-Renounceable Rights: What They are, How They Work
https://www.investopedia.com/terms/n/nonrenounceablerights.asp#:~:text=A%20non%2Drenounceable%20rights%20issue,cannot%20be%20bought%20or%20sold.

What Are Non-Renounceable Rights?
A non-renounceable rights issue refers to an offer issued by a corporation to shareholders to purchase more shares of the corporation (usually at a discount).

Unlike a renounceable right, a non-renounceable right is not transferable, and therefore cannot be bought or sold.

KEY TAKEAWAYS

A non-renounceable rights issue allows existing shareholders to purchase more shares of a company at a discount.
Those shares can't be traded.

A renounceable right, on the other hand, permits the trading of the rights.

Companies might offer non-renounceable rights issues if an urgent need for cash arises.

Understanding Non-Renounceable Rights

Issuing more shares dilutes the value of outstanding stock. But because the rights issue allows existing shareholders to buy the newly issued stock at a discount, they are compensated for the impending share dilution. The compensation the rights issue gives them is equivalent to the cost of share dilution. However, shareholders who do not take exercise the rights by buying the discounted stock will lose money as their existing holdings will suffer from the dilution.

Renounceable Rights

A renounceable right is also an invitation to a company's existing shareholders to buy additional new shares in the company. If the shareholders are not required to immediately pay for the new shares, it is called "nil-paid" shares. While shareholders have the authority to buy more shares, they can renounce that privilege and trade their rights on the open market.

Why Companies Offer Non-Renounceable Rights

By offering non-renounceable rights, the company is setting a narrow window of opportunity for shareholders to purchase stock at discount. Offering such rights can be seen as more favorable to the company than to existing shareholders, despite a discount being offered. If the shareholders do not have sufficient funds at the time the non-renounceable rights are exercisable, they may lose the opportunity to buy at the discount rate. Regardless of what action the existing shareholders take, the company will proceed with issuing more stock.

A company might offer non-renounceable rights on shares if there's a timeframe and capital objective the business needs to meet. It may need to raise funds for an acquisition, expand its operations through hiring or adding new locations, paying back debts, or any number of things. The company might be facing bankruptcy if it doesn't address its capital circumstances.

If the company must raise capital to maintain its prospects as a going concern, it might be necessary to issue shares regardless of the potential dilution to existing shares. Non-renounceable rights are a way for the company to give existing shareholders the chance to maintain their stake in the business while controlling the leeway available to them to take advantage of the discounts. For shareholders, this can be seen as a less than desirable option than being offered rights they could conceivably sell on the market and see returns for themselves.

Expand

thanks for the details mate.
I'm still relatively new to investing and not all that certain with terminologies regarding options and in this case non-renounceable rights.

my main question is if the newly acquired rights cannot be traded then why would shareholders opt in if they won't be able to get any money from them? Or are they only non-tradable for a particular time frame after which the company may propose for holders to exchange them for cash value or ordinary shares?

I acquire the non-renounceable shares how will I ever get a return on the shares/ rights "IF" the company find a good Nb deposit or any other exploration campaign?

No.	Vol.	Price($)
8	5649737	0.7¢

No.

Vol.

Price($)

5649737

0.7¢

Price($)	Vol.	No.
0.8¢	1888743	5

Price($)

Vol.

No.

0.8¢

1888743

No.	Vol.	Price($)
8	5649737	0.007
11	3620140	0.006
9	4310000	0.005
6	5177500	0.004
3	2380000	0.003

No.

Vol.

Price($)

5649737

0.007

3620140

0.006

4310000

0.005

5177500

0.004

2380000

0.003

Price($)	Vol.	No.
0.008	1976243	7
0.009	1690081	5
0.010	2385033	7
0.011	266900	3
0.012	948460	2

Price($)

Vol.

No.

0.008

1976243

0.009

1690081

0.010

2385033

0.011

266900

0.012

948460

(20min delay)
Last 0.8¢		Change 0.000(0.00%)		Mkt cap ! $6.995M

Open	High	Low	Value	Volume
0.8¢	0.8¢	0.8¢	$13.25K	1.687M

Ann: Consolidation/Split - RR1, page-31

Almonty Industries – Now it is getting critical!

Lithium Universe leaps 40% after buying rights to flashy solar panel recycling tech

ASX Market Open: Shares down as Trump threatens 'real end' to Israel-Iran conflict | June 18

Listen: HotCopper Wire Podcast 013 - They changed the IPO rules (and that's a good thing)

Many are concerned about global falling birthrates. This diverse stock has solutions

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Ann: Consolidation/Split - RR1, page-31

Top Stories

Almonty Industries – Now it is getting critical!

Lithium Universe leaps 40% after buying rights to flashy solar panel recycling tech

ASX Market Open: Shares down as Trump threatens 'real end' to Israel-Iran conflict | June 18

Listen: HotCopper Wire Podcast 013 - They changed the IPO rules (and that's a good thing)

Many are concerned about global falling birthrates. This diverse stock has solutions

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News