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AFDAWN NPL Corporate Event: African Dawn Capital Limited (ADW) Rights Distribution Offer

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chidya
New Contributor
Can anyone explain to about this "Corporate Event: African Dawn Capital Limited (ADW) Rights Distribution Offer" I got a letter the contents of which are giving me "Nil Paid Letters" The price is written as ZAR0.10. Is this value equivalent to 10cents or it is 0.1cents. Please can you expain to me if they say I have 50000 NPL shares. How much must I pay if I am to go for Option 1 which is to buy the 50000 NPL shares Thank you
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7 REPLIES 7
Gert15
Contributor
I had a similar question some time ago. If I am right then ZAR0.1 is 10c @ 50000 you will require R500 to convert the notes to shares.
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SimonPB
Valued Contributor
I did a NPL video at http://www.justonelap.com/SearchResults.asp?name=NPL
Short version, they are the right to buy new shares at the 10c price. You could take up the rights or you can sell them on the market. Either way you have a limited time to do so as they expire.
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DaMerlin
Contributor
What happens when it expires and you have not sold them on the market or taken the election? Do you lose the shares completely or do you get paid out at a specific price?
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SimonPB
Valued Contributor
if you neither sell the NPL's nor take up the offer they expire and you get nothing. But you do keep the shares you initially had ..
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Not applicable
My personal advice, is to follow Sun Tzu's art of war principle. Feed success and starve failure. You are already exposed with a troubled asset. If you like the recovery story - fine - but let your original exposure work its magic, and plough the rest of your money into something with a better track record. Whatever you do though - don't do nothing! The NPL itself has value, for a limited time period only.
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DaMerlin
Contributor
And after that time period, what happens to the shares?? Will I get paid out??
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Not applicable
Suggest you google NPL to see how the mechanism works. It is like having a put option on a share. Once it expires, it is worthless. If you do not exercise your right to buy the share, then you lose the right. Your existing shares are fine, but you will be diluted accordingly. If you sold the NPL, it would compensate you in part for the dilution. Check out Simon's website - he is much better at explaining these things than me!
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