Share Purchase Plans (SPP)? | Aussie Stock Forums

Search SPP and a whole range of threads come up. This one seems the most sensible.

In the old days, the early 2000’s, SPPs weren’t necessarily tied to other capital raising initiatives. With the maximum at $2,500, then $5K, companies could run a SPP and pick up some cash. No-one got too much of an allocation, things were peaceful. Then by the GFC, the top amount went to $10K and quickly to $15,000. This is serious money for many, and uptake became polarising if the discount was sufficient. Applications began getting scaled back. Strategies like just holding a few became more common, as in SPPHarvester and the like.

More recently, when the 10 year ‘sunset clause’ was due to be remade, at Oct 2019, the limit increased to $30,000, initially for 12 months then ASIC extended it during the the Covid downturn, when corporates thought to bolster balance sheets. So it sits at $30K.

With the opportunity to top up at a discount (usually), I find it a good way to invest if I can see the money going to benefit the company – growth, an accretive acquisition (sometimes to lower debt). However, of the 10 or so I have participated in, only three have allowed the full application. MIR was one, AR9 also and spectacular for me , and the third, EOL, was limited to $11K.

Currently, 4DX, PKS and CXL have all scaled me back, usually in the order of 70-80%; expecting DEM, closed early, to do similar.

It is annoying, as the directors have discretion as to how and it becomes a guessing game. Another aspect is the release of information is patchy and poorly conveyed. I have first learned of allocations by noticing the share increase on broker site.

And to tie up $120K with uncertain outcome is tricky. And the other warning for players; with early stage companies, probably not paying dividends, if the registry doesn’t have details, then money comes as a cheque, by snail mail. The catch is that details have to be lodged before the SPP closes (but this isn’t mentioned ealier)

[for CXL], holders with EFT details recorded will be paid today and should receive funds on April 14, 2021. Those without EFT details will be sent a cheque, which may take several days to process and send.

Be the first to comment

Leave a Reply

Your email address will not be published.