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A rights issue is when a listed Company wants to extra raise money it's a cheap and convenient way to raise extra income. The Company offer their existing shareholders more shares at a preferential rate. The offer is usually based on the number of shares the shareholder already holds, if the shareholder already holds 100 shares and the basis of the offer is 1 for 1 that will entitle the shareholder to apply for 100 more shares at a set price, which sometimes lower than the current market value. However, if the shareholder does not wish to take up the offer, they can sell the "rights" to some one else via a broker, this is called "nil paid" rights.
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