TCL Entitlement Offer - How the Public Portfolio would handle this and record the actions in the Portfolio Manager

The Transurban share price was placed into a trading halt earlier last week so that it could undertake an equity raising to support its acquisition of the remaining 49% stake in the WestConnex toll road network from the NSW Government.

Whilst TCL is not currently part of the ASX Equal Weighted Public portfolio, this is how we would handle the Retail Entitlement Offer.

The Share Rights (TCLR) would be sold at market once they appear in the broker account. This action is consistent with previous reactions to these matters - typically we do not buy extra shares when an offer is extended as we’ll not know in advance the status (open/closed) of the stock when the shares will appear in the account. (We don’t want to hold shares in a closed position)

Your situation may be different, please ensure it is consistent with your investment plan or if there is no rule in your investment plan, write in your action to stay consistent going forward. We recognise that customers situations may be different and due diligence should be practiced.

The acquisition of these rights could be recorded as a New Trade with the price of 0.000001 and zero brokerage.


If the rights are then sold the proceeds can be recorded in the trade ticket, to capture the brokerage paid as well as any gains made.

If you have any further questions, please continue the discussion below.

An alternative action to selling on market through your broker is ‘Do Nothing’. The Rights will be sold into the Retail shortfall bookbuild and shareholders will receive net proceeds. Refer TCL letter to shareholders, dated 20 Sep 2021, option 4. (Selling is option 3). Pros and Cons – selling via broker returns funds asap available to be invested elsewhere whereas, do nothing is simpler, no brokerage, different net proceeds but funds are delayed about 10 business days. In either case, the net proceeds are miniscule compared to the portfolio value and brokerage may be a significant fraction.

I’m not sure how easy it is to write one ‘Rule’ to cover all Rights Issues apart from the principle that the Rights will be disposed of (to keep the EW balance etc). Rights issues (and bonus issues) go in fad cycles and each can contain unique T&C’s.