Is This A Buy Yet??????????? @115p

so, whats the rights price..?

LONDON (Thomson Financial) - Buy-to-let lender Paragon Group of Companies said it is raising 287 mln stg through a deeply discounted rights issue in order to plug a funding gap left by the credit crunch.

Paragon, which lends to house buyers who aim to let out their properties, said the proceeds will be used to repay a 280 mln stg loan that falls due on Feb 27.

Under the terms of the rights issue, which has been fully underwritten by investment bank UBS, shareholders will be offered the opportunity to buy new shares in the group at an effective discount of 90.2 pct to its Jan 10 closing price of 102 pence.

Paragon, which relied entirely on the wholesale markets to finance its mortgage lending, has had problems raising funding since worries over rising defaults against US sub-prime mortgages prompted banks to largely suspend lending to each other in August last year.

'The board believes the rights issue will provide Paragon with a platform from which it can pursue further funding, so the company can return to writing significant volumes of profitable business when credit markets reopen,' Paragon chairman Robert Dench said in a statement.

so does it mean new shares will be 10p....? i don't get this..

I can’t get my head round this not holding so I’m not going to bother but on the other side they are saying this is expensive and should be @ 20p-30p some punters have lost a lot of money this morning there was sells of 100k earlier not nice to wake up to.

Missed the bounce, sold for small profit after costs, not worth the heart attack!!

At 55p 1 share gives you the right to buy 25 new ones at 10p I think ?? to early for me :)

Some stuff from the other side.





In your example your £1K bought you 1000 shares.

These will be consolidated on a 1 for 10 basis, so you will have 100 shares.

You will then be offered 5 new consolidated shares at £1 each for every 2 non-consolidated shares you currently hold (the 10p ones), you will therefore be offered 25000 new shares at £1 a piece. If you take up the full rights your holding will be 25100 consolidated shares at a cost of £26K. You would need the consoldated SP to rise to £1.036 to get your money back.

However, a £25K investment is a pretty sizeable committment if you only had £1K invested beforehand.


Davius is that right... its 25 share at 12p?



No, rights shares are effectively 10p per share, not 12p. They are priced at £1 per new share (a new share is 10 old shares consolidated).

And you don't have to find the money to take up the shares. You can sell your rights, assuming they have any value. But if the rights don't have any value, then PAG today doesn't have any value either!

Thanks Driver, I think I will stick with GCM :)

Grief! - er Gulp!
- and I hate Companies that shuffle their shares . . . CONsolidation is just that IMHO - a CON, designed to make punters think Execs have done some good ( so they collect their Bonus), and . . . . . . that's allright then.

26Nov2007 (sp c.?1.40)...On news they were to sell-off the Car division...I said: " - - - I agree, it smacks of a Fire-Sale - not full blown, with sirens blaring - but a nasty whiff of smoke in the air.... - - - "

-And now punters see a sp that is halved at a stroke. . . .
Do I believe the sp now is "correct" and therefore worth a punt, or has this boat lost its engine last year and the rudder has stuck on some weeds and we're heading for the river-bank?

When I saw this today I thought: - Maybe a bounce, ie Worth a punt, but my hands have remained in pockets for some while now and in these "Troubled Markets" I suspect that is the best place for them.

When posters "here" can't fathom out what the effect of the Rights will be, and we can't find the "price", . . . . . . . . . . . . it smacks of Management having to put out a statement before the deal is fully worked-out.
-OR - the deal is so bad they hope that by releasing it gently the damage will be minimal.
To use another water-word:-
- BARGEPOLES

I just hope those who bought arround Nov07 have a few gains elsewhere to balance.
.......but all Sectors are affected and anything connected to Property, or Banks (esp. Mortgages), and worst of all IMHO is Sub-prime, or what we call Buy-to-Let, for it has been reported elsewhere that B2L investors have been relying on Capital Gains to offset poor Rental-returns since about 2005 - fortunately 2005, 2006 and most of 2007 saw house-prices rising, as folk continued to believe they "had to " get a Mortgage, before Interest-rates rose.
What they appear to have missed is that for every 1/2 percent rise in interest the Housing Market stalls and many properties are being offered at discounts of 10% - 20% and more.
Paragon sold ( did they?) their car-loan business I read - and this was a sensible thing to do, but far too late IMHO. . . . Car sales have been down for years as new models offer "cashback". This affects the secondhand market as folks can't make sense of it; and it looks like waiting is Good.

My suspicion FWIW is [PAG], correct-price with this rights is 50p - but if the take-up is shakey, or Others sell their old shares, then it could easily drop to 30p; demonstrating the true-worth of this Management and their abilities to plan forward.
I cannot see new housing being a good investment for at least a year and if past-experience is anything to go by, it could be more than 2 years before there is any hint of housing-recovery and that will start in North-London ( the Olympic-anticipation ). . . .
Any opposing views...?

hangon
Cheers good post I agree with the housing for at least another year and the rights statement is just a mess
Hands in pockets it is then.

Is this proposed share consolidation and rights issue merely an attempt by the underwriters to take control of PAG if existing shareholders dont take up the offer?

Driver shouldn't the above example be you'd be offered 2500 shares at £1 and if taken up in full folding would be 2600??? 1000 shares @ 0.10 / 2 gives you 500 times 5 = 2500 + the consolidation total holding 2600..... Anyone else working this out the same????

explosive
Yes and I still don't like the look of it.

The question is what will the shares be worth after the rights issue?

In the past I have purchased shares in a rights issue, to find that there was a lock in period of a week or so, to work out uptake and float the rest on the market. During this time it may well be possible to purchase at a lower than float price with no lock in. Remember just because you hold you don't have to buy more shares at float price. Thankfully I was out of this one a month or so ago, but will watch with intrest as the full extent of the dilution becomes apparant. DYOR.

This rights issue with the consolidation is a huge dilution especially as funds raised are to be used to pay off lenders however needs must, without this would PAG survive. NRK all over again!

Unfortunately I have got caught up in this one, I had a stop loss on the postion and got closed out this morning at the lowest price of the day at .55p. I bought the shares back at a higher price. I am not going to buy any more share in the rights issue. I am having difficulty in understanding how I stand in the rights issue. I would just like a simple to understand explanation of how this will end up. Lets just use an example on say 10,000 shares for eg. can any of you explain to me the position. I do not think the shares will drop now they have settled today around .62p. I am making a terrific loss on this one, and to say I have a bad cold at the moment. This was the last shock I needed for the week end. This may be an opportunity for other to enter. We will have to wait and see. Good luck all.

Have any others on here been caught out on this one?

janet .... don't feel like the lone ranger is dumb choices of shares ..... i have been a star performer in that particular league in the last couple of weeks, and i am sure there are plenty of others who are just too shell-shocked to hold their hands up ..... for me, thank goodness for IEC and a couple of others!

cut your losses, dust yourself down and work out a strategy to rebuild

british bulls were saying this was a buy at 1.20 a few days ago, so much for brit bulls They are now telling people to wait. Their last sell recommendation for this stock was the beginning of dec. I do not think a deal to british bulls they get it wrong many times.