RIO - Rio Tinto

shag · 5 June 2009

tommyben said:
Sorry I'm quite new to the market and have some RIO Shares

Would you be allowed to buy more than you're entitled too in the rights issue?

they said on boardroom radio, punters in macbank and that recent steel cap raising/spp, got more than their entitlements when the paid up more dosh. check it on the australian weekly roundup.
i guess when it all comes down to it, moneys money to these fellas and personal holdings/value mean little to them. still seems a little strange.

oldblue · 5 June 2009

shag said:
they said on boardroom radio, punters in macbank and that recent steel cap raising/spp, got more than their entitlements when the paid up more dosh. check it on the australian weekly roundup.
i guess when it all comes down to it, moneys money to these fellas and personal holdings/value mean little to them. still seems a little strange.

Not a hope!

It's an entitlement issue. And it's underwritten so any shortfall will be a great freebie for the underwriters. At today's cum issue price, the theoretical rights value is near enough to $29!
If they trade under about $25 I'll be buying some.

airpoe · 5 June 2009

shag said:
they said on boardroom radio, punters in macbank and that recent steel cap raising/spp, got more than their entitlements when the paid up more dosh. check it on the australian weekly roundup.
i guess when it all comes down to it, moneys money to these fellas and personal holdings/value mean little to them. still seems a little strange.

correctly me if i'm wrong but for the Macq Bank wasn't the maximum $15k?

So you could of send more than 15k & would still get more shares?

awg · 5 June 2009

Nyden said:
No, for Australian investors the record date is the 22nd. The 11th is for RIO plc.

It really is a substantial discount, I must say; I just might take it up : Either way, my BHP holdings are sitting very pretty

happy days BHP and RIO, especially as I picked up good parcels near lows

fair bit to think about with RIO now, divs suspended, dilution, some downward pressure on SP?

If the Chinese customers decide to play hardball, that could have effect.

I am sure they will be peeved, time will tell whether supply requirements will hold up iron ore prices.

nearly got on FMG, could be some buy-ups in them and the smaller players

oldblue · 6 June 2009

airpoe said:
correctly me if i'm wrong but for the Macq Bank wasn't the maximum $15k?

So you could of send more than 15k & would still get more shares?

You could for Macq Bank but you won't be able to for RIO.

It's a pro-rata entitlement issue. It's underwritten, the rights will trade on the exchange and have a theoretical value of around $28 - $29 based on the latest cum rights price.
If the rights fall below about $25 I'll be buying a few!

mfsperth · 6 June 2009

Re: RIO - Rio Tinto BHP tie up and dumping Chinalco

There is $195m of shareholders' funds going to Chinalco as a break fee.
Then there will be all the fees to underwriters etc for the new rights issue.
Does the board really know what it's doing?

shag · 6 June 2009

its still a bit shonky. the guys giving the weekly roundup in the australian said/implied give it a go if u have the spare dosh. but i wasnt in on the macbank one so dont know if it was pro rata or a supposed limit of 15k. maybe not relevant to rio but maybe others.
the other one they used as an example, bluescope steel?, was well in the money also.

db96 · 6 June 2009

Can someone confirm some of these dates as it can be confusing

1) Last date to trade RIO on ASX to be eligible for the rights issue. Is this different to the record date.
2) The rights trading is from Wed 17/06/09 to Wed 24/06/09. I guess the price will depend on the RIO sp.
3) The date when the new shares will be allowed to trade on the ASX. Many thanks.

alter1217 · 6 June 2009

I have some RIO shares. What is the last day I can sell my RIO shares so that the buyer will be able to get the share issue rights? It says 17th is the record date... But what about shares being T+3, is that relevant?

niknah · 6 June 2009

Look under "Rio Tinto Limited" here...
http://stocknessmonster.com/news-item?S=RIO&E=ASX&N=318932

11-jun record date for acceptance forms.
16-jun dispatch of the acceptance forms
17-jun ex-rights, *** buy before this date!
22-jun record date for entitlements.
26-jun Another dispatch of the acceptance forms.
10-jul Normal trading of the new shares commences. *** sell here!

But they'll probably have the acceptance form available for download if you don't receive one in the mail.

db96 · 7 June 2009

niknah said:
Look under "Rio Tinto Limited" here...
http://stocknessmonster.com/news-item?S=RIO&E=ASX&N=318932

11-jun record date for acceptance forms.
16-jun dispatch of the acceptance forms
17-jun ex-rights, *** buy before this date!
22-jun record date for entitlements.
26-jun Another dispatch of the acceptance forms.
10-jul Normal trading of the new shares commences. *** sell here!

But they'll probably have the acceptance form available for download if you don't receive one in the mail.

Thanks Niknah. That has clarified a lot of things. But is it not better to go short from the 17/06/09 which is the ex rights date.

abc_loveit · 7 June 2009

Hi all,
I am a new investor. My question is, if I buy RIO on Tuesday (9th of June), will I be entitled to the right issues, thanks,

alter1217 · 7 June 2009

niknah said:
Look under "Rio Tinto Limited" here...

11-jun record date for acceptance forms.
16-jun dispatch of the acceptance forms
17-jun ex-rights, *** buy before this date!
22-jun record date for entitlements.
26-jun Another dispatch of the acceptance forms.
10-jul Normal trading of the new shares commences. *** sell here!

But they'll probably have the acceptance form available for download if you don't receive one in the mail.

If you were going to sell them all asap....
Shouldn't you sell your (existing) RIO shares on the 17th (maybe 18th)? You'd still be quoted the rights? Then take up the share issue, and sell the 2nd batch on the 10th July? You'd get rid of your shares faster that way but still get involved in the share issue. Am I correct?

happymark · 7 June 2009

hi guys,
I have some rio shares - say 100
Please correct me where posible --
Shares just before announcement were $65 ------------ $6500
Taking up the 50% extra new shares 50 at $28 costs----$1400
Total cost -----------------------------------------$7900

Shares after capital rasing will be diluted to about $55 ??
So after take-up the 150 x 55 -------------------------$8250
profit then is ------------------------------------------$350

Shares are currently $72 before taking up new shares--- $7200
profit with sell the 100 now without share offer takeup $ 700

My logic must be wrong somewhere can anyyone help??

alter1217 · 7 June 2009

happymark said:
hi guys,
I have some rio shares - say 100
Please correct me where posible --
Shares just before announcement were $65 ------------ $6500
Taking up the 50% extra new shares 50 at $28 costs----$1400
Total cost -----------------------------------------$7900

Shares after capital rasing will be diluted to about $55 ??
So after take-up the 150 x 55 -------------------------$8250
profit then is ------------------------------------------$350

Shares are currently $72 before taking up new shares--- $7200
profit with sell the 100 now without share offer takeup $ 700

My logic must be wrong somewhere can anyyone help??

Maybe something in the announcement other than the capital raising made the share price go up so the assumption "Shares after capital rasing will be diluted to about $55" may no longer be correct?

oldblue · 7 June 2009

Yes, the "diluted to about $55" is pure supposition. In fact, the mathematical figure is $52-66 but this itself is based on an approximation ( the ratio is 21 for 40, not 1 for 2).

I prefer to work on the following basis:

Asssuming a SP prior to the announcement of $65, 40 shares cost $2699 plus 21 new shares at $28-29 cost $594, a total of $3194.
The 61 shares therefore have an average cost of $52-36.

If we work off the closing price on Friday of about $72, the average cost is $56-95. This gives a theoretical rights price of $28-66 but of course anything can happen to change this during cum rights trading and after that it's anyone's guess.

rustyheela · 7 June 2009

So amid all these confusing dates and other stuff blah blah .....

when the rights become tradeable if you buy 1 right ( say $ 30.00 ) is this equal to 1 fully paid share ( plus the $28.29 payable or do you have to buy 40 rights to access 21 new shares,
or will 1 right ( equivalent to 40 ) cost x amount giving access to 21 shares?
all this thinking is compounding my hangover!!

oldblue · 7 June 2009

rustyheela said:
So amid all these confusing dates and other stuff blah blah .....

when the rights become tradeable if you buy 1 right ( say $ 30.00 ) is this equal to 1 fully paid share ( plus the $28.29 payable or do you have to buy 40 rights to access 21 new shares,
or will 1 right ( equivalent to 40 ) cost x amount giving access to 21 shares?
all this thinking is compounding my hangover!!

The 21 for 40 ratio has no bearing on the matter once the shares go ex issue. At that point, the rights accrue to the registered holder and can be taken up or sold. Any number can be bought, subject to any rules on the matter that your broker may enforce as to a minimum, and each right is a "right" to a new share and will cost another $28.29, payable to the company.
It is normal for brokers to bill clients for the cost of rights, plus the application money and for them to be responsible for lodging the application. They then normally charge brokerage on the all-up cost!

rustyheela · 7 June 2009

I have some RIO shares. What is the last day I can sell my RIO shares so that the buyer will be able to get the share issue rights? It says 17th is the record date... But what about shares being T+3, is that relevant

thereotically, for the buyer they have to buy 3 days ( t+3) before the record date wouldnt they?
With the santos STO rights issue i was stopped out on the 13th may
( record date was 14th may ) but received a rights offer doc from computershare and was advised this was because of t+3

oldblue · 8 June 2009

17 June is not the "Record Date".

"Existing RIO shares quoted ex-rights 17 June."

This implies that you can Buy/Sell cum rights up to and including 16 June. Given the "T+3" system, the company is allowing themselves until 22 June to record entitlements.
( "...Record Date for entitlements..... 22 June " )

That's my interpretation but I wouldn't be buying or selling without confirmation from my broker!

RIO - Rio Tinto

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