IFT - Infratil

[Rif-Raf]

What it means is actually what it says.
Because they are offering some new shares on the cheap (assuming that the recent slide does not continue too far ) which sort of dilutes your existing shares (and thus also warrants) value the exercise price of the warrant will be reduced to compensate for that. If you look at the Warrant Investment Statement you will find the mentioned formula.

These numbers are illustrative purposes only but fr'instance the B exercise price of $1.75 may become $1.68.
The exercise date will remain the same.

When they doubled the number of shares they halved the exercise price, thing of it has a similar event.

Hope that helps .

Thanks PT. In other words the dilutionary effect of issue will hold the SP growth a little and for warrants this will be compensated for slightly by the warrants having a slightly reduced excercise price.

[Caesius]

I'm loving this! People betting on a $0.07 growth in the head SP in more than a year.

Why oh why oh why do I have no more money to buy more warrants?

[lissica]

Does anyone know if the warrants are eligible for the rights issue?

[nso]

lissica see post by Paper Tiger above. Warrants participate via a reduced exercise price.
Eg if you shove numbers into the formula published on page 10 of the investment statement {New Ex Price = [Current Ex price - Conversion rate * (head price - rights price + div due) ]/[rights ratio +1]} then (eg for the IFTWC warrants) then old price = $4.25; conv rate = 1 for 1 (one share per warrant); head price in week before ex date (say) = $3.20; rights price =$2.00; div = ignore as recently paid one; rights ratio = 1 for 5.
So a $3.20 head price implies a $4.05 warrant exercise price (in June 2012). Similarly a $3.00 head price implies a $4.0833 exercise price.
Which makes some sense to me as the difference (425 less 405 = 20c or 425 less 408.33 =16.33c) is the same as the difference in value of head shares - eg I have 1000 heads @ $3.20 = $3200; then 1:5 rights at $2.00 each = 200 shares for $400 => 1200 shares all up for $3600 giving an average of $3600/1200 = $3.00 each - difference = 20cents per share = same as for warrant exercise price. In similar vein if heads at $3.00 the 1:5 at $2.00 gives average per head of $3400/1200 = $283.33 or 16.33cps diff - same as for warrant exercise price.

When the new shares are partially paid (up to $1) during first year then I'm not sure how formula ought to altered - inclined not to alter actually, as the extra $1 is callable and does not apply to the shares that warrants convert to. Just guessing this last bit.

[lissica]

Thanks nso, I had to read it a few times but it makes sense! Cheers

[Caesius]

Ok, I need something explained:

IFT buyers at 2.91, last trade 2.92 - fairly stable. As for the IFTWB's, first buyer is at 1.11.

Now, head SP - excerise price = 2.91 - 1.75 = 1.16 (correct?)

So somehow people are valuing the price of IFT shares lower than the price of IFT shares. The same ones.

Why are there IFT buyers at 2.91 when the IFTWB buyers are valuing IFT at (effectively) 2.86? It's always seemed to me like the warrants trailed the heads, not the other way around.

This confuses me...

Disc: IFTWB
Disc: would be buying a lot more if I had any $$$ too.

[living2]

Isn't the IFTWB excise price to be reduced after the cash issue?
DISC:Overweighted in IFTWB

[Caesius]

Could you elaborate on that?

[zigzag]

Ok, I need something explained:

IFT buyers at 2.91, last trade 2.92 - fairly stable. As for the IFTWB's, first buyer is at 1.11.

Now, head SP - excerise price = 2.91 - 1.75 = 1.16 (correct?)

So somehow people are valuing the price of IFT shares lower than the price of IFT shares. The same ones.

Why are there IFT buyers at 2.91 when the IFTWB buyers are valuing IFT at (effectively) 2.86? It's always seemed to me like the warrants trailed the heads, not the other way around.

This confuses me...

Disc: IFTWB
Disc: would be buying a lot more if I had any $$$ too.

Caesius - you have forgotten to factor in the dividend. I don't know the exact timing, but if IFT pays two more dividends before the exercise of the warrants, that could add up to an extra 10-12 cents, which would explain the difference.

[Rif-Raf]

Caesius - you have forgotten to factor in the dividend. I don't know the exact timing, but if IFT pays two more dividends before the exercise of the warrants, that could add up to an extra 10-12 cents, which would explain the difference.

Yes that's true, but then the warrant holders have got less funds invested so the cost of that money will more than make up for the divvies.

I've observed that the correlation between the heads and the warrants often gets a bit out of kilter which I thinik is just realted to market depth largely.

Mildly Negative news , is the judicial review on the Wellington airport landing charges. Also rights issue may be creating a bit of selling pressure for those needing to find the dosh.

On the other hand an article in papers yestrday about how bad Heathrow airport has become with high charges, lack of investment hindering their ability to operate. Airlines and travellers now avoiding Heathrow like the plague. Is this playing into IFT's long terms plans for Kent?