^OPM^

Hi,

Got a few Thomas cook shares and they have had a rights issue recently which in know what that entails etc. but as part of there debt reduction plan they have split the current shares that had a nominal value of Euro 0.10 and gave you 1 new ordinary share of Euro 0.01 and 1 deferred share of euro 0.09.

Now what does this deferred share mean-reading on net it says the are a lower class of share when it comes to dividend payouts but that don't worry yet to Thomas cook shares. Also says sometimes in time these shares get cancelled anyway so why issue them to ordinary share holders then?

So are these shares ever going to be of monetary benefit to me? as in one way they have just doubled my amount of shares they own but at same time the free half they have gave me are worthless? will they always be so.

Any help?

speedking

http://www.investopedia.com/terms/d/deferredshare.asp

^OPM^

I found that link and that tells you what i already said-i more specifically wanted to know what they meant in regards to Thomas cook shares-as in , why did the company do this split , for what reasons etc.

Fat Boy

Read the prospectus - you should have got it and you can get it on line

^OPM^

Didn't get a prospectus just a letter from bank that holds them in CREST account.With do a bit more research , just thought someone else on here cleverer than me might also hold TCG shares and could explain to me.

GlesgaKiss

There is news from the 16th of May entitled Capital Reorganisation.

I think it tells you everything you need to know, including:

"The Capital Refinancing Plan will:

-- significantly reduce the proportion of debt funding of the Group's balance sheet; "

and

"I am delighted to be able to announce this fully underwritten and comprehensive GBP1.6bn refinancing of the Group. This successful synchronisation of a new bank facility, new bond issue and new equity issue, which reduces leverage and strengthens our liquidity profile, highlights a new found confidence in our business, not just within the business, but also confidence in the Group from our external stakeholders. The re-rating of our equity, bank debt and bonds is reinforced by S&P's and Fitch's upgrade confirmations as part of this refinancing."

The deferred shares will probably not be ideal for you in the short-term since they are being used to strengthen the company. And if they are getting rid of debt, issuing these shares must be a much better deal. But they are never a good deal for shareholders at first. It's like taking a pay cut at work so you can continue to work there and your company can get through a tough spell. Issuing shares is usually only done when other avenues have been exhausted since it screws (in the short-term) the people the company is supposedly being run for. But in theory, you should be grateful for it in the long-run.

^OPM^

Actually GlesgaKiss I think the re-financing is a great idea, the bit you have posted though is referring to the rights issue part of it-which I fully subscribed to and now the extra shares are getting sorted in the market place the share price has began to climb again, a more than content holder for the foreseeable future I am.

I did manage to find a lengthy article released from company about the whole thing and after reading it found out the reason basically for issuing the new shares was that under some terms-cant remember what but because of more shares being issued and the dilution factor the shares might have gone under the nominal value of 0.10 Euro's so to stop that happening they split the shares so the normal ones had a nominal value thereafter of 0.01 Euro's and you had a deferred share making up the rest back to the value of 0.10 Euro's.

So it was just a way of getting around that ruling of the share price falling below its nominal value and to stop it happening, the deferred shares are basically worthless.

Or that is how I understand it after reading document.