Options - help

I own a ASX listed stock and just got a message about them offering options and I have a few questions.

Questions:

• How from NZ do I say 'yes' I want to participate? (I trade with ASB)
• Where and how do I keep track of the option? - is it in the share registry or what?
• If the share price goes above 80c how do I tell them to transfer the option into a share and buy it at 80c?
• 'within 2 years' - what happens after two years? Throw out the contract and the 5c lot of money I put down?
• The offer is not underwritten - what does that mean?
• what does unquotable mean?

Under the terms of the rights issue, eligible shareholders will be able to subscribe for 1 New Option

for every 2 Shares they hold (New Option) at an issue price of $0.05 per New Option (Offer).



Each New Option will be unquoted and exercisable into one Share at an exercise price of $0.80

within 2 years of the date of issue.


The Offer is not underwritten.

(https://wcsecure.weblink.com.au/pdf/CPH/02001542.pdf)

1. There will be a form which will be sent to you at a later date which you would be required to complete and return to them should you wish to participate in the options issue. This was stated in the document you provided above.

"Further information of the Offer will be sent out in a prospectus. The prospectus is intended to be lodged with ASIC on or about 25 July 2018 and mailed to eligible shareholders shortly after the record date. Shareholders may view the Company’s ASX announcements, including those relating to the Offer, on the ASX website under the ASX code CPH. Persons should consider the prospectus before deciding whether to acquire securities and eligible shareholders will need to complete the personalised entitlement and acceptance form that will accompany the prospectus in order to apply for New Options under the Offer."

2. My understanding is that you would have to contact the company and see if they can find a buyer for your options. They can't be traded on an exchange and as a result are likely to be very hard to resell.

3. They should explain this to you in their additional documents they mentioned they will be providing. You would just contact them however they suggest.

4. Correct, if you did not want to exercise the option during the period, you would of paid the option purchase price which would be a sunk cost. The option would no longer be executable.

5. The offer not being underwritten means that no investment bank has guaranteed that they will purchase the options if retail investors don't take up the full amount on offer. I.e. this is only being offered to the existing shareholders, not any other third parties.

6. I believe the fact the options are unquotable means you can't sell the option on the stock exchange as they won't be listed. You would be the only person who could exercise the option. As per 2) you would have to contact the company if you wanted to resell the option and see if they can find someone who wants it. This is likely to be pretty difficult and painful.

Quote:

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Originally Posted by Investor

1. There will be a form which will be sent to you at a later date which you would be required to complete and return to them should you wish to participate in the options issue. This was stated in the document you provided above.

"Further information of the Offer will be sent out in a prospectus. The prospectus is intended to be lodged with ASIC on or about 25 July 2018 and mailed to eligible shareholders shortly after the record date. Shareholders may view the Company’s ASX announcements, including those relating to the Offer, on the ASX website under the ASX code CPH. Persons should consider the prospectus before deciding whether to acquire securities and eligible shareholders will need to complete the personalised entitlement and acceptance form that will accompany the prospectus in order to apply for New Options under the Offer."

2. My understanding is that you would have to contact the company and see if they can find a buyer for your options. They can't be traded on an exchange and as a result are likely to be very hard to resell.

3. They should explain this to you in their additional documents they mentioned they will be providing. You would just contact them however they suggest.

4. Correct, if you did not want to exercise the option during the period, you would of paid the option purchase price which would be a sunk cost. The option would no longer be executable.

5. The offer not being underwritten means that no investment bank has guaranteed that they will purchase the options if retail investors don't take up the full amount on offer. I.e. this is only being offered to the existing shareholders, not any other third parties.

6. I believe the fact the options are unquotable means you can't sell the option on the stock exchange as they won't be listed. You would be the only person who could exercise the option. As per 2) you would have to contact the company if you wanted to resell the option and see if they can find someone who wants it. This is likely to be pretty difficult and painful.

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Thanks for your reply

Thanks from me too,Investor, very helpful, and thanks FIsaver, for the questions on my mind too.

Quote:

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Originally Posted by Yoda

Thanks from me too,Investor, very helpful, and thanks FIsaver, for the questions on my mind too.

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In terms of this specific offer, I've decided not to take up the offer as don't feel that it is attractive enough. $ have better use elsewhere.

You are both welcome.