There must be a number of ways to interpret this. Here are two that spring to mind:
Optimistic: Making the shares available (does it mean 14% of total shares - I'm not sure) could mean that an additional investor is out there, prepared to invest £6m (a drop in the ocean, I'd have thought). but perhaps the investor will increase his/her holdings in the near future?
Pessimistic.
No investor has come forward and the share issue may fail as previous BIH issues have.
Got to say that issuing shares for 'working capital' (i.e. cash used for day to day payments) seems to be a strange move. I thought we were in the black with HSBC, so couldn't we just increase our overdraft or re-negotiate loan repayment terms?
kro
http://www.hkexnews.hk/listedco/listconews/sehk/20110803/LTN20110803003.pdf
This is a downloadable PDF.
There will be some investment but from what I can make out BIH are transferring the money to Inkatha Group Ltd who are based on 'British Virgin Islands'
They have no link to BIH employees. This will allow BIH to float on the stock market and generate cash through shares. All 636 million of them.
Any experts who could put a laymans side to this?
KRO
"Any experts who could put a laymans side to this?"
Haven't read the article but from your description it sounds like they're transferring ownership of the holding company to another offshore entity,based in the BVI.
It's like selling BCFC to someone else but that someone else could well be you,or not as the case may be.
It's common practice for houses(big ones!),luxury yachts,private jets etc.It's normally used to circumvent capital gains or some other government tax.
For example,I own a large house but when I bought it I wanted to be able to sell it without having to pay,for example,the UK Govt huge amounts of stamp duty.
What I do is set up an offshore company and buy the house using the new company.Then,when I want to sell the house I just transfer ownership of the offshore company to the new owner and bingo,no house sale,no estate agents or greedy taxman grabbing my cash.
Just the offshore company having a new owner, the same company which happens to own the house!
BTW,this loophole was closed in the UK a long time ago,I just haven't lived there for many,many years!
There are I believe big annual taxes to pay on houses owned by offshore companies now,so don't try this at home kids!
New Investment
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posted on 3/8/11
There must be a number of ways to interpret this. Here are two that spring to mind:
Optimistic: Making the shares available (does it mean 14% of total shares - I'm not sure) could mean that an additional investor is out there, prepared to invest £6m (a drop in the ocean, I'd have thought). but perhaps the investor will increase his/her holdings in the near future?
Pessimistic.
No investor has come forward and the share issue may fail as previous BIH issues have.
Got to say that issuing shares for 'working capital' (i.e. cash used for day to day payments) seems to be a strange move. I thought we were in the black with HSBC, so couldn't we just increase our overdraft or re-negotiate loan repayment terms?
kro
posted on 3/8/11
http://www.hkexnews.hk/listedco/listconews/sehk/20110803/LTN20110803003.pdf
This is a downloadable PDF.
There will be some investment but from what I can make out BIH are transferring the money to Inkatha Group Ltd who are based on 'British Virgin Islands'
They have no link to BIH employees. This will allow BIH to float on the stock market and generate cash through shares. All 636 million of them.
Any experts who could put a laymans side to this?
KRO
posted on 3/8/11
Only 1p a share , jump in lads ,
im having 100. kro.
posted on 3/8/11
"Any experts who could put a laymans side to this?"
Haven't read the article but from your description it sounds like they're transferring ownership of the holding company to another offshore entity,based in the BVI.
It's like selling BCFC to someone else but that someone else could well be you,or not as the case may be.
It's common practice for houses(big ones!),luxury yachts,private jets etc.It's normally used to circumvent capital gains or some other government tax.
For example,I own a large house but when I bought it I wanted to be able to sell it without having to pay,for example,the UK Govt huge amounts of stamp duty.
What I do is set up an offshore company and buy the house using the new company.Then,when I want to sell the house I just transfer ownership of the offshore company to the new owner and bingo,no house sale,no estate agents or greedy taxman grabbing my cash.
Just the offshore company having a new owner, the same company which happens to own the house!
BTW,this loophole was closed in the UK a long time ago,I just haven't lived there for many,many years!
There are I believe big annual taxes to pay on houses owned by offshore companies now,so don't try this at home kids!
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