Golden Prospect subscription shares exercised

Golden Prospect subscription shares exercised – Golden Prospect Precious Metals Limited says that the subscription trustee has exercised all of the 10,336,782 outstanding subscription share rights (the rump of subscription shares that hadn’t been taken up by subscription share holders).

The ordinary shares that arose from the exercise of the rump have been sold by finnCap Limited by way of a secondary market placing, raising total net proceeds for the company of £4.77m. This money will be distributed to the holders of the rump subscription shares by the end of the year, but after deducting the cost of exercising these rump subscription shares and all the costs and expenses of the subscription trustee, the registrar and the secondary market placing.

Following the exercise of all subscription share rights, the company has raised a total of £13.14m, resulting in the net assets now exceeding £50m. Dealings in the new shares will commence at 8.00 a.m. on 9 December 2020.

[This is a textbook example of how these things are supposed to work. An unloved and subscale trust trading at a discount has turned itself around, become one of the best-performing trusts of the past year and is finally a reasonable size.

Investors who held onto their subscription shares from when they were first issued are in substantially the same position as they would have been had the subscription shares not been issued, whether they chose to put in more money or not.

The ‘losers’ in this scenario are investors who sold their rights before subscription or bought shares in the company after the subscription shares had been issued. In the former case, unless the sale was done recently, they probably missed out on the upside. In the latter case, their returns have been diluted by the subscription shares. They haven’t done badly, however.]

GPM : Golden Prospect subscription shares exercised

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