Frequently Asked Questions

A Rights Issue is a Corporate Action where a company offers its shareholders the opportunity to purchase further shares:

• In proportion to their existing holding (e.g. 3 new shares for every 10 held)
• For cash (e.g. to fund a takeover bid)
• A a price set by the company
  (The price is set at a discount to the price of the Ordinary Shares to persuade shareholders to buy)

Example:

Company has one million 25p shares in issue and the current market price is 200p. It makes a rights issue of one new share for every four held at 150p.

To work out how much the rights issue will dilute the Ordinary Share price by:

Therefore:

Theoretical ex-rights price - Each share is worth 9.50 ÷ 5 or £1.90
Theoretical nil paid price - Ex-rights price less the subscription price, i.e. £1.90 - £1.50 = 40p

Key Dates

Record Date

When: Dependant on Event

The date used by the Registrar to determine who they contact/pay.

Ex-Date

When: Dependant on Event

You must be a beneficial holder of the Ordinary shares at the close of business on the working day prior to the Ex-Entitlement Date.

Any person buying the ordinary shares on or after the Ex-Date will be purchasing without Rights. Similarly any person who sells their shares prior to the Ex-Date will not be eligible.