What Are Nil Paid Shares

What are Nil Paid Shares?

When no payment has been make for a new issue of shares from a Rights Issue (NPD or Nil Paid Rights).If you want to invest in the Company, than you will be debited with the total Call Cost and than the shares will be allocated to your holding.

Alternatively, you can sell your Nil Paid rights in the market to allow somebody else to take up the offer. The Nil paid shares are traded the same as other trades and will attract the same dealing costs.

If you do nothing, your allocation of shares will lapse, and sold on the stock exchange and should they be sold above the Rights Issue price than you could receive a lapsed rights cheque from the Company.

Can I purchase Nil Paid Rights in the market?

Nil paid shares are available to purchase and normally cease trading 2 days before the call date. However, PEP and ISA regulations exclude them from buying Nil Paid Shares.