What does "consolidation of shares" mean?

[stargazer]

Hi all

Could someone please tell me what consolidation of shares mean. I am referring to NIA (Niagara Mining) that indicated this recently.

How does it effect existing shares held and how are the future shares bought.

I believe the consolidation is 2:1

Cheers
SG

 

[Glenhaven]

Re: Consolidation

Do not know about HIA in particular, however, a consolidation just reduces the number of shares on issue by a specified ratio and changes the par value to leave the company book value the same.

In a 2:1 consolidation, if you owned, for example, 2000 shares, your share holding would reduce to 1000 post consolidation.

All cases behave slightly differently, however in theory the market price would double and the value of your stay the same.