Share Purchase Plans

I don't like to create a new thread as it clutters the site but couldn't find anything under share purchase plan.

I was just reading the Auckland Airport thread and the discussion how the airport will fund its fixed costs and debt with no income. Even after four weeks it doesn't sound like the door will be thrown open to tourists.

Share Purchase Plans may start popping up as companies seek to find funding during the crisis. In the GFC all the share purchase plans I bought into turned out to be nearly the bottom for most of those companys and they were offered at attractive pricing to get uptake.

I can't recall if there was a window of opportunity to buy shares in the company after the SPP announcement but if there is you could buy a small stake (depending on the offer) and top up at what might be attractive prices.

I was wanting to ask posters to update this thread if they were aware of any Share Purchase Plans being offered which might allow other posters the chance to check it out. It would be a purely philanthropic gesture as there is no benefit to you, although having more people join a SPP might help the Balance Sheet and the company share price. just a thought as I don't usually troll through the NZX and ASX announcements and would be more likely to pick it up on this thread.

I think you mean this sort of thing: Kathmandu Equity Capital Raising which are not known as SPP in normal terminology. Best change the thread title.

From my unreliable memory banks, Aaron, I remember a flood of SPP's by Australian companies when that form of capital raising first became popular. I think that the usual drill was for announcements to be made simultaneously with entitlement to the issue, i.e. those already on the register qualified for the issue. It became popular to hold a small number of shares in companies that might make a SPP!

Edit. Since then, the usual practice has been to raise a big chunk from instos first, with shareholders often getting a smaller slice. Justified by the need for speed!

Quote:

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Originally Posted by macduffy

From my unreliable memory banks, Aaron, I remember a flood of SPP's by Australian companies when that form of capital raising first became popular. I think that the usual drill was for announcements to be made simultaneously with entitlement to the issue, i.e. those already on the register qualified for the issue. It became popular to hold a small number of shares in companies that might make a SPP!

Edit. Since then, the usual practice has been to raise a big chunk from instos first, with shareholders often getting a smaller slice. Justified by the need for speed!

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Yes it looks like a bad idea. SPP were a bit different to rights issues in that they asked for a $10, $20 or $50k chunk of cash. Snow Leopards example is a entitlement/rights issue done on a pro-rata basis although it is a good example as the entitlement offer is for 50cents a share whereas if I am not mistaken Kathmandu's share price is currently over a $1 but I guess the dilution impacts the share price(potentially more than doubling the number of shares on issue). The record date is this Friday so trades are +3days so effectively it is only open to current shareholders if I am correct. This would confirm that it was a bad idea and this thread should be deleted, unless companies desperate for cash start putting more and more generous offers out to get investor cash as time goes on.

Thanks for the replies, I will put more thought and effort into ideas before posting next time. I might even be able to dig up an old SPP from the aussie banks back in 2008/09 and look at what they did back then.

Settlements are "trade plus two" these days but in Kathmandu's case the shares are in a trading halt. Still are, I think? so effectively they are ex issue. I expect them to trade down to near the 50c level when trading resumes.

Generally I don't understand why investors would want to touch Kathmandu? SPP (Share Purchase Plan? ) must be from the INVESTOR'S point of view and not from the corporate - "Equity Capital Raising" is a more clear terminology.

So why do so many listed companies on the NZ/ASX enjoy diluting share ownership when they do these SPP? I mean it's nothing new overseas but I see it all too often happen on NZ companies. The Warehouse Group has done this from time and time again - just to keep padding their dividend paying policy.

Not a fan at all. Yesterday CCL (Carnival Cruise Lines) asking for $6B USD.

https://www.reuters.com/article/us-h...-idUSKBN21I1QA

Current market cap of CCL is $9B - so is it ok to ask 2/3rds of the company value in a new share & bond offering? Who are these fools and fund managers buying into such rubbish companies?

This one was a beauty at 50 cents in 2009
http://www.stuff.co.nz/business/indu...t-targets-debt

I see AIA has a SPP but as pointed out only for shareholders already on board so no good for me. Also if scaling is required it will be based on your shareholding at the record date/announcement (I think) so owning 1 or 2 shares would only work if everyone tightens their pockets and doesn't join in and you apply for $50,000. Note that $50,000 is a significant amount for me so the SPP idea would only work for small timers like myself. Somehow I don't feel that bad that I missed out, monopoly asset but won't be making as much for a while. Hard to say what happens with international tourism once the lock downs are lifted. No dividends for the foreseeable future but my short term thinking is why I always miss great opportunities. Time will tell if this was one.

In response to my comment about Carnival Cruise Lines CCL - it's share offering / investment has attracted Saudi Arabia investors:

https://www.barrons.com/articles/sau...al-51586182943

"The Public Investment Fund, Saudi Arabia’s sovereign-wealth fund, recently purchased a large stake in the embattled cruise line Carnival. Public Investment disclosed that it owns 43.5 million Carnival shares (ticker: CCL) as of Monday in a form filed with the Securities and Exchange Commission. The fund’s investment amounts to an 8.2% stake in the cruise line. It is now Carnival’s third-largest shareholder, according to S&P Capital IQ."

So is the stock a buy? Perhaps so if you're looking at a long term horizon like over 5 years. Perhaps a lot better than many of the NZ listings. Certainly far more than Kathmandu.

But overall... what does floating shares and issuing bonds really mean? It means the company is broke and needs $$$ ; easier to pass and buy quality.