Why Does The Company Need More Money?

There can be a number of reasons why a company wishes to raise extra money, the main reasons are to expand the Business, i.e. purchase new equipment, or new premises, or to finance a takeover of a company.

The reasons will always be publish in an offer document which will be sent to all registered shareholders along with the Application form. It will be determined by the shareholders on how they perceived the company's plans as to weather they participate. 

It may be that the company requires addional capital to fund the company's existing operation. This can not be viewed as a bad thing, it's not always wise to expand, or assume that the company is not doing very well, all business needs a cash injection some time.