FPA rights issue,any thoughts? [Archive]

whatsup

26-05-2009, 12:02 PM

With the upcoming rights issue we are obviously looking at a almost another company but will the future be kind to FPA bearing in mind that the game is over for most of their products for a couple of years at least, this is a very large issue and it will need to be under written for it to be successful.
With the moving of its manufacturing base off shore yes its cost of manufacturing will be substantially lower but will that alone help to make up for the drop in sales that it is surely experiencing.
I personally dont think that the $200 m is large enough for the company to be asking shareholders for but if it were another $100 mil that I personally think that FPA should have asked for I think that that really would have spooked the market and put it really under the spot light!
My thoughts only any comments?

macduffy

26-05-2009, 12:27 PM

Well, it's all speculation at the moment so we don't know how much they need to raise from shareholders.
It's also difficult to know how much they really need given that the equity shortfall largely arose as a result of breaching covenants on foreign currency borrowings. The NZD has strengthened considerably since so that situation will have improved, but to what extent I'm not prepared to guess.

:confused:

JoeBlogs

26-05-2009, 01:35 PM

Remember they introduced partial hedging when the kiwi was still low, so that locks in some of the debt - I'm not sure to what level, but it's not 100% floating like it was when the kiwi tanked.

I think the possible cornerstone stake to a major player is a real positive here. It means several things, including effectively a 'seal of approval' from the major investor.

I don't see why they need to raise NZD 200 million unless there have been significant changes to the plan to sell land and reduce working capital.

Sehnsucht888

27-05-2009, 09:30 AM

I think they would get good take up on rights issue. If the results are erasonable for this quarter, and they can put a good case to the use of 200 mill from a rights issue, I would think that that would be taken better than a large chunk going off shore. If the chinese are lapping these types of things up - and they are - then we should be too.
Sure there have been issues, but if they can get back on coarse, then there are great prospects. I would hope that if a large cornerstone investor is found then there is also a rights issue to spread the load and minimize the chunk exported..
Not long till we know ...

whatsup

27-05-2009, 09:58 AM

Rights issue to existing shareholders after placement of 20% to new cornerstone share holder then 1/1 issue at .41 cps to raise $189m.

Good deal under the circumstances should be well received by the market.

The BOWMAN

27-05-2009, 10:07 AM

98c open? Cricky, that's way too high.

upside_umop

27-05-2009, 10:17 AM

Its a much better deal than what was achieved by NPX, thats for sure.

I would have liked to have seen First Cap NZ shunned completely from this deal though...

macduffy

27-05-2009, 10:20 AM

98c open? Cricky, that's way too high.

Yes, the market certainly likes it! Of course there could be a bit of the "Dow effect" in that price too with Wall St having a strong dat.
Doesn't look like many cheap rights will be on offer with a theoretical rights price, at the moment, of around 28 cents.

JoeBlogs

27-05-2009, 10:30 AM

I think the market reaction shows that many investors have been on the sideline waiting for the long term prospects for FPA to become clearer.

I got out this morning at 98 c as I agree with the Bowman that the shares are slightly overcooked at this level. I wouldn't be supprised if they go higher short term, but having more than doubled my money in just a few months, I'm happy to sit on the sidelines until the histeria dies down.

Just goes to show, if you have a strong view, and stick to your guns, it can pay off in spades :D

winner69

27-05-2009, 10:42 AM

2010 guidance is for normalised profit to be $32,8m down slightly on the $33.8m this year ... so no growth expected for a while

Allowing for the new shares EPS for 2010 to be about 5 cents

Makes current share price pretty rich but theen markets don't do fundamental things any more .... just follow market sentiment ... if it positive get on the gravy train ... when it turns to custard get off ..... could make heaps out of this .... and of course insiders had no idea this was coming did they.

dartMonkey

27-05-2009, 10:51 AM

.... and of course insiders had no idea this was coming did they.

I wondered why it went up last Friday especially given the DOW was down so much. Not significant volume admittedly but very strange I thought amongst what was otherwise a sea of red.

JoeBlogs

27-05-2009, 10:57 AM

You don't have to be an insider to realise when things are coming to a head. Speculation was rife for months preceding this. As reported very early on, the longer FPA took to announce capital raising initiatives, the greater the likelyhood they were undergoing due dilligence from a potential major shareholder. Of course there are always going to be a few wispers from those in the know though.

I just wish I'd mopped up a few more last week.

The BOWMAN

27-05-2009, 12:03 PM

whatsup

27-05-2009, 12:47 PM

$1.04 is higher than im picking its worth at present but with the recent NPX raising I think that there plenty out there that think the same will happen here, dangggggggggggggerous!!

Stranger_Danger

27-05-2009, 01:34 PM

In my opinion, NPX and FPA have nothing in common.

Nuplex was done under great stress and FPA is being done in a far nicer environment, crucially, with the market being able to look in the rear view mirror at the NPX raising.

Without knowing a single fact about either company, these two contrasting scenarios means the odds of Nuplex being well priced (in hindsight) and way higher then FPA being well priced (in hindsight).

IMO Nuplex is a company with a future, although they won't boom anytime soon.

But a washing machine maker based in a Western country, still with high debt levels, but no longer owning their land? Really?

Finally, FPA now have the dubious pleasure of a Chinese cornerstone, to go with the dubious pleasure of being a "national icon". Both of these allow a certain financial complacency whereas I think Nuplex management have had the scare of their life and now know that banks show no mercy, institutions don't work for them and that their future is entirely in their hands.

No way for me.

OldRider

27-05-2009, 04:55 PM

seagull

27-05-2009, 05:04 PM

Old rider the record date for NZ entitlements is 7pm Thursday June 4th 2009. See page 36 of presentation for the timetable. IMHO the future looks brighter for this company. I suspect many institutions will join the register over time. Cheers

macduffy

27-05-2009, 05:11 PM

I haven't seen any dates for the rights issue, so presume shares purchased in the interim until these dates are set will qualify for it, as well it is a rights issue not an SPP therefore the number of shares from rights is certain.

Therefore each share purchased today at $1.00 will be intitled to another at $0.41c--
cost for each $0.705

Yes, I'm sure that today's buyers at $1+ will be expecting to have bought cum issue!
The theoretical rights value is now around 29-30c. Too rich for me to buy more but I'll be taking up my entitlement, rather than sell the rights.

Dr_Who

27-05-2009, 05:39 PM

Damn, I missed out on this one.:(

whatsup

27-05-2009, 05:48 PM

Dr Who, its the early worm that gets eaten!

Balance

27-05-2009, 07:43 PM

Damn, I missed out on this one.:(

And on Allco, MFS, Babcock and Brown, and Hellaby?

Can't take all the pretty ladies out, Dr Who!

Steve

31-05-2009, 08:01 PM

I will be taking up the rights for my small holding...

belgarion

01-06-2009, 09:23 AM

And on Allco, MFS, Babcock and Brown, and Hellaby?

Can't take all the pretty ladies out, Dr Who!

Oh so very true. (Add NPX and FBU and others ...)

Wish I'd bought more FPA ... but if all my dogs barked at once (which they've almost been doing!) I'd not have the cash to take the ladies out for more than fish and chips (purchased on credit) and an evening view from MtEden.

Actually, the dogs have been doing more than barking ... They've been howling to wake the dead in the last few months!

Balance

01-06-2009, 10:39 AM

Oh so very true. (Add NPX and FBU and others ...)

Wish I'd bought more FPA ... but if all my dogs barked at once (which they've almost been doing!) I'd not have the cash to take the ladies out for more than fish and chips (purchased on credit) and an evening view from MtEden.

Actually, the dogs have been doing more than barking ... They've been howling to wake the dead in the last few months!

There are a few characters in this forum who are the best indicators of when to buy or sell. When they use words like 'dog tucker', stuffed etc, you know it's time to load up BIG.

biker

02-06-2009, 06:59 PM

Lightened up a little on these today at 1.16 with a view to possible rebuy during rights trading. If not, then still happy to have locked in some of the profits and will take up the remaining rights.

JoeBlogs

03-06-2009, 03:41 PM

Good deal on the rights across the ditch. Picked some up for 26 c, which is at a pretty good discount to the sp (63 c).

I hope I haven't got my wires crossed, it's 41 c NZ isn't it? Almost looks like 41 c AU being priced in???

nwood

04-06-2009, 09:40 PM

Rights code : FPARA

Will be interesting to see how trading goes

Dr_Who

05-06-2009, 08:01 AM

Rights code : FPARA

Will be interesting to see how trading goes

What day does trading of the rights start and finish?

nwood

05-06-2009, 08:05 AM

Trading starts today (05/06/09)
and finishes (23/06/09) for the NZSX

nwood

05-06-2009, 10:15 AM

Rights ~30c
Shares ~70c

The BOWMAN

05-06-2009, 10:43 AM

Rights ~30c
Shares ~70c

I say it will drop another 10% or so today when punters find out that no money to be made from this.

Dr_Who

05-06-2009, 10:48 AM

Trading starts today (05/06/09)
and finishes (23/06/09) for the NZSX

Many thanks

nwood

05-06-2009, 11:07 AM

I say it will drop another 10% or so today when punters find out that no money to be made from this.

Sold my shares at 75c, still holding options at this stage

Blairski

09-06-2009, 08:06 AM

First time poster here so bare with me - alternatively, feel free to laugh...:)

Having recently re-entered the market buying a holding of FPA @ .62c - I have had a bit of luck. I then sold more than half the holding to lock in some profits. My question is this (which is probably a stupid one - however, I have trawled the internet looking for an answer so I am forced to ask it)...

Why would I participate in the rights issue with my remaining share allocation at .41c when you (can buy?) the current FPARA at .28c

Blairski

macduffy

09-06-2009, 08:38 AM

FPARA are the rights trading on the NZX.

They represent the "right" to pay 41c to the company for the new shares.
You need to compare the sum of the FPARA and 41c, to the price at which FPA shares are trading. The rights (28c + 41c ) are slightly cheaper than the old shares (70c ).

;)

Of course, you could sell your rights ( for 28c ) if you don't want to take them up, but brokerage will reduce the proceeds of course.

Blairski

09-06-2009, 09:11 AM

aaahhh, thankyou for the reply Macduffy.

I have been reading the forum for sometime, have learnt alot and really enjoy it - it's a credit to the quality of the members and administration. Congratulations.

Blairski

Dr_Who

09-06-2009, 09:48 AM

Hey Blairski, just becareful not to get caught with holding the rights when it finishes trading. The rights are worthless unless you pay for it when the trading stops.

COLIN

09-06-2009, 10:48 AM

First time poster here so bare with me - alternatively, feel free to laugh...:)

Blairski

A hearty welcome to the forum, Blairski. (Although I'd rather not "bare with you" in this cold weather!)

Hope you enjoy your time here.

Blairski

09-06-2009, 12:34 PM

Thanks Dr_Who for the warning which I was not aware of, I think I'll just take up the remaining shares I am eligible for and leave it at that.

COLIN apologies for the inuendo, I wouldn't want to bare anthing in this weather either - it wouldn't be a fair reflection...:o :D

spook

10-06-2009, 06:21 PM

I Might be a bit slow on the uptake, but I found today's SSH Notice unnecessarily obtuse. Can anybody else decipher it? The intention seems
to be to hide whether the shares have been bought or sold

winner69

10-06-2009, 06:35 PM

I Might be a bit slow on the uptake, but I found today's SSH Notice unnecessarily obtuse. Can anybody else decipher it? The intention seems
to be to hide whether the shares have been bought or sold

Orbis and its related parties disposed of 2,428,580 shares on market on June 4th to unknown buyers .... reducing their interest from 8.96% to 6.77%

This number of shares would not have required a SSH notice except the 58 million new shares has also diluted their holding quite significantly (from 8.96% to 7.47%) .... bastards those FPA guys