# RBS rights issue



## Lee May (27 May 2008)

Any Royal Bank of Scotland shareholders out there who can shed any light on the rights issue please, which is due for a response by 6 June 08 leaving only a small window to seek advice about it? I think it is a 1 for three issue but don't know the ins and outs of it. Would appreciate any advice. Shares currently trading at around 2.43 sterling.  Thanks in advance.


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## Brendan Burgess (27 May 2008)

We do not discuss individual share prices on Askaboutmoney.

That does not prevent you from discussing the mechanics of the rights issue. 

But do not speculate on whether it is a good buy or not.

Brendan


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## Mpsox (28 May 2008)

The rights issue is being offered at 11 shares for every 18 held at £2 per share. You have the option of taking up the full rights, part of the rights which you can transfer or do nothing

Understand where you are coming from regarding advice, the documents sent out were awful unless you have a good knowledge of financial services(which thankfully I have). I can't recommed whether or not you take up the rights, however myself and my wife are (as I worked for them and my wife still does) and we have a lot of shares bought via share save schemes and this will maintain our dividend payout going forward, which, everything else being equal, should be less per share


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## Brendan Burgess (28 May 2008)

A friend sent me this response:

Due to the ongoing credit crunch  the majority of banks are finding it difficult to raise necessary funds for  their lending books and on top of that many have suffered large losses relating  to the sub prime mortgage markets in the US. To maintain  their capital base many banks are engaging in rights issues, including  RBS.


The RBS rights issue is being  offered at 11 shares for every 18 held at £2 per share, which is a discount to  the current price of £2.36


The bottom line is you should  probably take up your rights if you believe that RBS and banks in general will  recover from the current slump.

If you don't, your shareholding in the company will  be diluted. Also by taking up the rights issue you will be buying shares at a  deep discount to the current market price of circa 15/20% and on top of that you  will not have any brokerage fees for buying the shares. 


I am a shareholder and I  am subscribing myself. 


The documentation was poor and pretty difficult to  interpret I have to say, but if you are subscribing just send RBS a sterling  cheque for the amount posted on the application form.


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## Lee May (28 May 2008)

Thanks to all for the replies, which were all v helpful. Yes, it was really the mechanics of the subject that I needed illumination on and I acknowledge it is a personal judgment call at the end of the day. All info received was very clear and informative, thanks to all.


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## nicelives (28 May 2008)

I wasn't happy with the documentation either, when you compare it to the user friendly brochures they sent about everything else, ah sure, is there a place to trade the options (as in pass on the option to buy to another) in Ireland?


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## Brendan Burgess (28 May 2008)

Your stockbroker should be able to sell your rights for you.

Alternatively, there is usually a facility in rights issues of the unexercised rights to be sold in the market by the company and the proceeds returned to the shareholder. 

Part of the problem with such brochures is that there are very strict disclosure requirements and they cannot be done simply.

Brendan


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## nicelives (29 May 2008)

thanks for that, will look into


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## tomhen (30 May 2008)

I would agree that the documentation leaves a lot to be desired. I took up the rights issue and sent my payment on Monday last.

Did any of you have any problems with your payment. On the documentation it said that third party cheques will not be accepted with the exception of Building Society cheques or bankers drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the cheque or draft to such effect.

Obviously I had to get a sterling draft and got it in BOI on Monday. When I asked them to endorse the back of the cheque they refused saying they have never done that before. When I showed them the documentation they said it was badly worded (which I didn't disagree with!!) and said that their understanding of it was what RBS would accept bankers drafts. When I tried to point out that they would only accept bankers drafts if they stamped or endorsed the back of the draft the bank clerk totally disagreed with me and just wouldn't stamp the back of it. I rang the RBS helpdesk in UK but last Monday was a bank holiday there so there was no-one to assist me. I also telephoned Permanent TSB and asked them about endorsing or stamping sterling drafts they too took the same stance as BOI and said they never stamp the back of sterling drafts.

This whole thing has me worried that RBS may reject my draft and I may have to forfeit my rights to take up the issue just because of some bungling bank clerks here. I sent on the draft anyhow as I am mindful of the deadine and I just hope they will accept it. 

Anybody else have this problem ????


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## ShaneMc (30 May 2008)

tomhen said:


> I would agree that the documentation leaves a lot to be desired. I took up the rights issue and sent my payment on Monday last.
> 
> Did any of you have any problems with your payment. On the documentation it said that third party cheques will not be accepted with the exception of Building Society cheques or bankers drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the cheque or draft to such effect.
> 
> ...


 
I believe they will reject your draft. I had this issue before when sending a sTG draft to a UK stockbroker. It had the same instruction that it be stamped on the back. I managed to get BOI to do it for me in one branch.

I'd try and get in touch with RBS before the deadline.


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## nlgbbbblth (30 May 2008)

The documentation is unclear.

Just send a draft and sign nothing if you are taking up the full rights issue.

Regarding endorsing the back of the draft - I just wrote my SRN (shareholder reference number) on the back. 

As I have "unreleased" shares with RBS (via RBS Group profit sharing 2006 / 2007 and 2008) I was offered 11 for 18 on these. 
The draft had to be in by 23 May. 
It was posted on 19 May. It also just had my SRN on the back. 

Computershare confirmed that it arrived on 21 May when I telephoned them earlier this week. 
They did not mention that they had any issue with the lack of endorsement. 

Logically, why should they? 
It makes no sense. Once the draft is payable to "The Royal Bank Of Scotland plc RE RBS Rights Issue" it shouldn't matter what is written on the reverse.


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## tomhen (2 Jun 2008)

I telephoned the helpline this morning. After I answered a few security questions they put me on hold for about two minutes and then they confirmed that they had received my draft, that everything was OK and that my new Share Certificates would be posted on the 16th June. I never mentioned anything about endorsing the back of a draft etc and they never mentioned it neither. So I am happy. As nlgbbbblth says once the draft is payable to RBS it doesn't matter what is on the back.

Again as previously posted the documentation, considering it is such a massive rights issue, was not the clearest. Or maybe they have decided to accept any applications on the rights issue because according to media reports the take up on this could be quite poor leaving the underwriters with a massive headache. If you think about it even if they get a 90% positive response to the rights issue that will still mean a £1.2 Billion headache for the underwriters. Not something I'd want.


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