#3440 - Rights Issue Timetable Chart - Public Companies and Equity

Rights Issue Timetable

Date	Application
At the latest 10 working days before Impact Day (but probably well before)	Draft Prospectus is submitted to FSA for approval FSA will approve the Prospectus based on Listing Rules requirements
Day before Impact Day	Board meeting to approve rights issue Underwriting agreement is signed and held in escrow
Impact Day	The day when the prospectus is published Rights issue is announced to the public by RIS If not signed at BM day before, underwriting agreement signed on Impact Day, but subject to conditions Prospectus Prospectus is sent out to Shareholders A GM will probably need to be held to pass relevant resolutions – LR 13 ASC, Authority, Pre-emption Rights Prospectus will therefore include notice of GM Underwriting Agreement Needs to be signed as the company will not want to go ahead with the issue without ensuring the shares will be taken up 87(a) FSMA necessary information in the prospectus includes information about underwriting
14 clear days (between Impact day and GM) = 18 calendar days	Need to give 14 (s307 CA) clear (s360 CA) days Due to ‘deemed service’ provisions in CA s1147 (and the fact that it’s clear days) the notice period will probably end up being about 18 days
General Meeting	GM to pass all resolutions GM is needed to disapply pre-emption rights in relation to fractional and overseas shares + giving directors authority to allot if necessary Need to pass shareholder resolutions e.g. Grant D’s authority to allot Disapply s561 Alter AoA (ASC)
Immediately following GM	POSTING OF PALS Must hold GM before sending out PALs because LR 2.1.5 FSA cannot make the admission to listing ‘conditional’ upon any event i.e. it cannot first admit shares to listing and then obtain the necessary resolutions for the rights issue to proceed (i.e. send the PALs to S/Hs)
One business day after GM – D Day	D-Day: Shares are admitted to Listing on the Official List and Trading on the Main Market (nil paid) Trading begins – this is the start of the offer period Nil-paid rights will have been credited to the accounts of qualifying CREST shareholders
10 business days or 14 non-clear/ calendar days after posting of PALs (PALs posted on GM day)	If pre-emption rights NOT disapplied Under LR 9.5.6 a premium listed co. must keep the offer open for a period of minimum 10 business days However, s562(5) CA 2006 states that if a premium listed co. has not disapplied pre-emption rights, the offer must remain open for 14 (not clear) days The longer of the two prevails. If pre-emption rights are disapplied Under LR 9.5.6 a premium listed co. must keep the offer open for a period of minimum 10 business days
Closing Day/Acceptance Date	Offer closes Offer closes at the end of the 10 business or 14 day period This is the deadline for acceptances and payment in full
Every date in the timetable AFTER this point – is determined by the underwriting agreement rather than the Listing Rules or the CA ‘06
Company notifies the underwriter of the rump Last sale of the rump by the underwriter Underwriter buys & pays the company for the stick Underwriter pays the company for the proceeds of the rump sales Underwriter fees are calculated

Approximate minimum length of time likely to take to complete rights issue from time of posting the offer until company can be sure of getting its money
1. Does company need to convene a general meeting of its shareholders?
  1. Minimum period required for calling a GM to pass ordinary or special resolutions is 14 clear days subject to any longer period required in the articles provided the three conditions in 307A have been met
    1. 360 CA 2006 allowing for the ‘clear days’ rule and the
    2. 1147 CA 2006 deemed delivery provisions
  2. Minimum period is usually about 18 days
  3. In order to allow dealings in the nil paid rights the offer cannot commence until after the shares have been provisionally allotted nil paid
    1. i.e. immediately following any general meeting
2. How long does the offer need to remain open for?
  1. Are pre-emption rights dis-applied?
    1. LR 9.5.6R the offer must remain open for a minimum of 10 Business Days
      1. In practice this is likely to amount to a minimum of 14 days allowing for intervening weekends
  2. If pre-emption rights are not dis-applied
    1. LR 9.5.6R the offer must remain open for a minimum of 10 Business Days
      1. In practice this is likely to amount to a minimum of 14 days allowing for intervening weekends
    2. 563(5) CA 2006 offer must remain open for 14...

#3440 - Rights Issue Timetable Chart - Public Companies and Equity Finance

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