Forum Archive Index - October 2000

["james.chamley" <james.chamley@xtra.co.nz>]

Is my maths correct?

The value of FFS rights presently

Rw = Mw - S / N + 1

Where
Rw =  theoretical value of rights presently
Mw = market value of FFS
S = subscription price 
N = number of righte required to be exercised per new share

so

Rw = 0.50 - 0.25 / 1 + 1
Rw = 12.5 cents

and

Value of FFS presently = 0.50
cost of exercising two rights = 0.50
Number of shares after exercise = 3
Total cost = $1.00
Value of each share once complete = $1.00/3 = $0.33 

So in order to get the investors portfolio value back to an equivalent
value as when trading at 0.80 a few weeks ago

$0.80 + $0.50 (execrise price) = $1.30
$1.30 / 3 = 0.43

In other words once the new shares are listed (at a theoretical price of
$0.33) they have to increase 30.3% in order for the holder to have the
same value of shares as he/she did when they traded at 0.80

Chances of that??

Isn't the only glimmer of hope now that once FFS is a stand alone
company then a raid of the register is easier to accomplish in order to
unlock that hidden value.

ie: if each share has a NTA of $1.40 currently then adding $0.50 to
exercise the rights gives an NTA of $1.90.  $1.90 / 3 = $0.63 cps.  So
at $0.33 shares would be trading at 52% of NTA.  They were trading at
that sort of discount at 0.73 when a sale was on the cards.

Doesn't seem like a great deal for the shareholders?

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