Lessons learnt from the recent interra resources rights issue

Interra resources is currently having a 1 for 2 rights issue. When I was trying to apply for the rights yesterday, I got a nasty shock when I didn’t see the rights for interra on the DBS atm machine. When I checked back on right offer information statement, I realized that only OCBC and UOB are the participating banks. I do not own any account with these 2 banks.

I could not use my friend’s ATM card for my application as the account had to be the same as the applicant’s or it will be deemed invalid. The good thing was that I still have some time to react as the application must be done by 21st September

I had a few options.

1) Pay via a cashier order.
Using this approach, I could either
a) apply for the cashier order via internet banking. In my case, for the DBS bank, I was told that if the application is made before 12pm, I will be able to collect the cashier order after 12pm the following day. Collection can only be done at selected branches.
I did not have the luxury to collect at their selected branches on a weekday. The rights application closes on the coming Friday.

b) Apply for the cashier order at the branch itself. This can be done at any branch. However, this adhoc application comes with a $5 processing fee if it is paid to a 3rd party.
Using this approach, I can still get my cashier order for the payment. However, I bear the risk of my cashier order and application failing to reach CDP if the mail gets lost.

2) Open a savings account with UOB or OCBC
This approach requires me to withdraw an amount to deposit into a new account consisting of
a) My rights + excess + application fee
b) Enough cash to fulfill the minimum balance criteria.
Using this approach, I need to maintain one more account and ensure that the balance stays above the minimum balance required.

In the end, I decided to go with approach 2. My new account is with UOB and the ATM card was issued and activated within the same day. I thought that this scenario may occur again in the future. Having a different bank account will be useful in situations like this.

Lessons learn
1) Always check the offer information statement
One should always check the details of the offer information statement in detail within the first few days upon receiving it. In the event that your bank accounts are not one of the participating banks, you still have time to react to this.

http://madstranger.blogspot.sg/2012/09/interra-resources-rights-issue.html

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