Ann: Despatch of Offer Document and Rights Offer Now Open, page-23

What you guys are seeing in your accounts is the tradeable rights to participate in the issue.. They are not shares, and although they have a set time period to “expire”, they aren’t options either..

Heres a copy and paste from my other thread post that gives you a general idea on how renounceable rights issues work..


A renounceable rights issue gives you the opportunity to trade your “right” to participate in an issue of capital to existing holders of an equity (ie a capital raise).. They are not fully paid ordinary shares..

The rights are traded through a special ticker that’s open for trading between specified dates..

Heres a generic and basic example..

Say you own 100 shares of xyz company on a date they call the “record” date (the record date is the date the company takes a snapshot of the register ledger with all of the outstanding shares and who owns what)

Xyz company announces a capital raising to raise $x through offering a renounceable rights issue to existing shareholders with the offering being 1 new share for every 5 owned on the record date for $1 per new share.

The rights trading ticker is xyzr

So you’re breakdown of what you can do is this:

100/5 = 20

Which means you can participate in the capital raise and apply to buy the new shares for $20 and increase your fully paid ordinary holding to 120 shares;

or

You can publicly trade your “right” to participate in the capital raise by offering 20 of your rights for sale in the special ticker xyzr (which is essentially like trading your shares publicly, but being rights they aren’t shares and therefore have no weighting) but you then cannot participate in the raise.. Your holding remains the same at 100 shares but you make a capital gain on the rights you may or may not sell publicly..

or

You can do nothing, not participate in the raise and not sell your rights to participate in the raise keeping your holding at 100 shares and nothing else happens..


Hope this helps..