First REIT

[FFNow]

If I was to purchase nil-paid rights in the market next week, how long will it take before I can subscribe for it via ATM ? Is there a need to fill in any additional forms etc ?

Thanks

What's this nil-paid rights? How come the rights are trading in the market now at 16 cents when the rights are sold for 50 cents? This is the first time I'm coming across a rights issue for my holding so I'm new to this department

[Nick]

If I was to purchase nil-paid rights in the market next week, how long will it take before I can subscribe for it via ATM ? Is there a need to fill in any additional forms etc ?

Thanks

What's this nil-paid rights? How come the rights are trading in the market now at 16 cents when the rights are sold for 50 cents? This is the first time I'm coming across a rights issue for my holding so I'm new to this department

Unit-holders who have held the units when it XR'ed were given the nil paid rights freely. They could either subscribe it or sell it in the open market. At the moment, you can pay 16 cents for the rights in open market (from those selling) and then exercise it at 50 cents a share in the ATM. The total cost is 66 cents which is lower than the current market price.

Of course, some risk-takers are buying it and hoping to make a quick buck if the mother price rises by a few cents by Wednesday due to leveraging.

[FFNow]

Investors with 1 lot of first reit would get 1250 nil paid rights. So, they can choose to sell the nil paid rights at $200 (1250*16 cents) or they can choose to exercise their rights at 50 cents and receive 1250 shares?

[iisterry]

Investors with 1 lot of first reit would get 1250 nil paid rights. So, they can choose to sell the nil paid rights at $200 (1250*16 cents) or they can choose to exercise their rights at 50 cents and receive 1250 shares?

Yes..

Or they can exercise their rights and apply for 750 excess rights at the same time.

[Nick]

Prospective investors have long raised questions about the short leases of its Indonesian assets. There is no freehold or leasehold concepts in Indonesia for foreign companies - instead HGB (right to build) titles is used. While these titles are short, they are relatively cheap to renew. Today's announcement should allay some fears.

the Manager is pleased to announce that the National Land Office of Indonesia has extended the
HGB title in relation to MRCCC (which was scheduled to expire on 27 August 2015) for a period of
20 years subject to, among others, the payment of a nominal premium and certain other standard
conditions, and therefore the condition precedent described above has been satisfied. The amount
of premium payable is approximately 193.2 million Indonesian Rupiah (approximately
S$28,006.252) and is payable by the vendor of MRCCC.

http://info.sgx.com/webcoranncatth.nsf/V...8002FB0DC/$file/Extension_of_HGB_title_for_MRCCC_13_December_2010_Final.pdf?openelement

There is a good explanation here which contains excerpts from First REIT CFO - http://www.investmentmoats.com/money-man...explained/

(Not Vested But Interested)

[bullrunner]

The price of first REITs have been knocked down quite badly in the recent buildup of this rights issue. I speculate that this may be due to many of the funds who are holding substantial amount of first reits shares selling partial of the rights to raise cash for the exercise of the rest of rights which would result in a crunch in terms of too much supply in the market for a short 1 week to balance their portfolio. If that hypothesis is correct, this looks in my opinion for retail investors a good time to cash in to pick up some of the main share or rights (following the CEO and directors who have decided to do the same) as this current drop in price is mainly due to the shareholders being forced to raise a lot of cash because of this exercise and many are caught unaware. Fundamentally there is little change in the business, the new acquisition should be quite safe as it is the parent company offloading the project and it is unlikely for sponser like lippo to take a short term view to sell out completely as they own a huge amount of shares and have underwritten to purchase their fair portion of the project

[EnSabahNur]

If I was to purchase nil-paid rights in the market next week, how long will it take before I can subscribe for it via ATM ? Is there a need to fill in any additional forms etc ?

Thanks

What's this nil-paid rights? How come the rights are trading in the market now at 16 cents when the rights are sold for 50 cents? This is the first time I'm coming across a rights issue for my holding so I'm new to this department

I dont think you mean sold for 50 cents.
50 cents is the cost of subscribing to 1 share. So if you have 1 right, you will have to fork out 50 cents to convert it to 1 share.

Nil paid rights merely mean the rights that have not been paid up to subscribe. it is sold at 16 cents because that is the theoretical value of the right.

If the normal share is selling for 66 cents for example, the value of the rights is 66- 50 cents=16.

[FFNow]

Yea I get it. Thanks all! It has been explained here as well: http://www.moneytalk.sg/2009/02/capitala...issue.html

[iisterry]

Anyone with experience in excess rights? Say you have 1,250 entitled rights and you decide to apply for excess.

Does the amount that you have to fork out for excess rights work out to $0.50 * 750?

If so, the excess rights are essentially free?

[lonewolf]

Anyone with experience in excess rights? Say you have 1,250 entitled rights and you decide to apply for excess.

Does the amount that you have to fork out for excess rights work out to $0.50 * 750?

If so, the excess rights are essentially free?

Not so. Excess rights are subjected to allocation by the rights manager. Only your allocated 1,250 rights shares are guaranteed if you choose to exercise them.

The remaining 750 excess rights will depend on the subscription level. In most cases, the rights manager will give priority to minority shareholders to round up to broad lot so I would say that your chances of getting that 750 rights shares is very very good.

In fact, I have participated in >30 rights issues and I can remember only 1 issue where my holdings was not rounded up.

So if you can afford it, it pays to put in an applications for the excess rights.