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How is the Net Asset Value worked out?
The net asset value represents the total assets of a fund or company (securities, cash and accrued earnings) minus any liabilities, divided by the number of shares on issue. The Barramundi Net Asset Value is calculated at the close of business each Wednesday and at month end and is announced to the stock exchange the following day. We update the website with the new NAV after it is announced. What does the "diluted NAV" mean?
The warrants (or options as they are also called) provide warrant holders with an opportunity to buy shares at a price of $0.75 on any of the above exercise dates. Warrant holders will probably only exercise their right to buy shares at $0.75 if the share price is at or above $0.75.
As a result the warrants will have a dilutionary effect on the share price. As an example, if on 27 October 2011 the share price was $1 and everyone exercised their warrants (paying $0.75), the average share price will come down (be diluted). Immediately prior to the exercise of the warrants there will be 100 million shares on issue and the market capitalisation (worth) of the company will be $100m (100m * $1). Once the warrants are exercised, the market cap will be $137.5m ($100m + $37.5m new money from the warrants) and there will be 150 million shares on issue. That would imply the share price should be $0.92 ($137.5m/150m shares). Market sentiment might mean its different to that in reality.
To make this clear to shareholders we publish a weekly net asset value and a diluted net asset value to show the impact.
What does “Trading at a Discount” mean?
It is common for listed investment companies such as Barramundi to have a share price that is different to the Net Asset Value (NAV) per share. Where the share price is lower than the NAV per share, the shares are said to be trading at a discount. Where the share price is higher than the NAV per share, the shares are trading at a premium. There can be many reasons for the shares trading at a value different to the underlying NAV including expectations of future earnings and market sentiment from time to time. See the share buyback tab for further information. What is the level and criteria for the Manager’s eligibility for the Management Fee and the Performance fee?
In return for the performance of its duties as Manager of the Company's Portfolio, Fisher Funds is entitled to be paid:
The above is an abbreviation of the relevant Management Agreement Clauses.
The general terms of the Management Agreement extracted from the Prospectus can be viewed here.
At what level of NAV discount to share price would Barramundi consider a share buyback?
The shares of a Listed Investment Company (LIC) such as Barramundi may alternate trading between a premium or discount to NAV. The Barramundi capital management policy as disclosed in the prospectus states that if in the opinion of the Board the price of the shares does not appropriately reflect the underlying asset value the board will from time to time consider buying shares in Barramundi. Any decision by the Board to acquire shares will consider other investment alternatives and whether the acquisition is in the best interest of the shareholders. The Barramundi Board will most likely consider a buyback programme when it believes the discount to be extreme, or greater than the discount ranges prevalent in similar investment vehicles. Where there is a significant discount, buying back shares can benefit shareholders. This is because using funds to buyback Barramundi shares is like buying the portfolio of shares held by Barramundi at a discount (lower) price than those shares could be purchased on the market. Buybacks will only be used where the Board believes this wil enhance shareholder value. If a decision is made in relation to a buy back then Barramundi is required to advise the market in advance. The Company currently has a share buyback policy in place until 31 October 2010, whereby it can acquire up to 5 million ordinary shares on-market. Click here to read our Share Buyback Policy.
PIE Regime
Barramundi is a registered Portfolio Investment Entity (PIE) for tax purposes. The PIE regime has significant advantages for shareholders:
FIF Regime
Barramundi will be taxed on most of its investments under the new foreign investment fund ("FIF") regime. Under the regime, Barramundi will apply the fair dividend rate ("FDR") method to calculate its annual income tax liability in respect of its investments. Barramundi will generally be treated as deriving taxable income each year equal to 5% of the market value of its investments (excluding those not subject to the FIF regime). Barramundi will generally not be taxed on any actual dividend received or any capital gains from selling shares subject to the FIF regime. The above comments do not constitute tax advice to investors, as tax implications will depend on each investor’s tax profile and circumstances. We encourage shareholders to seek their own tax advice.
When can my warrants be converted to shares?
The remaining warrant exercise dates for the Barramundi ‘B’ warrants are:
Tuesday 25 May 2010 , Tuesday 24 August 2010, Tuesday 23 November 2010, Tuesday 22 February 2011, Tuesday 24 May 2011, Tuesday 23 August 2011 and Thursday 27 October 2011 (Final Exercise Date).
You may exercise all or some of your warrants (subject to a 500 minimum) at any time during this period upon completion of an Exercise form and payment of $0.75 per warrant. You will receive one share for every warrant that you exercise.
Options or Warrants?
You may have heard Barramundi warrants (BRMWB) also being referred to as Barramundi options. These are the same things and can be called either “warrants” or “options”. Whatever term is used they entitle the holder of the warrant (option) to subscribe for a share at an exercise price of $0.75, exercisable on any of the above dates. Computershare Registry records these as options on your Statement of Holdings. These are listed on the NZX under the code of BRMWB and are categorised under the warrants section in the newspaper.
How do I check the value of my shares and / or warrants?
You can ask any sharebroker, check in the major newspapers or follow this link and type in the security code "BRM". The code for Barramundi warrants is "BRMWB". The stockmarket can be a complex place. However most of the key terms that describe market processes are relatively easy to understand.
This section gives a guide to some of these key terms – including terms that are found in the sharemarket tables in the newspaper. New terms are added to this list often, to ensure investors have an easy reference place for key phrases and terminology. Click on the link below to view:
If you do not already have the free Acrobat Reader software you will need to
download it from the Adobe website before you can view and print these articles. If you would like to ask a question, please complete the form:
Thank you for contacting us with your question.
We will respond with an answer as soon as possible.
Kind regards
Barramundi Limited
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