LPC Law Notes Public Companies and Equity Finance Notes
A collection of the best LPC Equity Finance notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through twenty-nine LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short these are what we believe to be the strongest set of Equity Finance notes available in the UK this year. This collection of notes is fully up...
The following is a more accessible plain text extract of the PDF sample above, taken from our Public Companies and Equity Finance Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Secondary Issues
Rights Issue | Open Offer | Placing | Vendor Placing | |
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Definitions | An offer to existing security holders to subscribe in proportion to their existing holdings made by the way of the issue of a renounceable letter | Invitation to existing shareholders not made by means of a renounceable letter so not tradable | An offer by the company to issue new shares and/or an offer by existing shareholders to transfer existing unlisted shares to specified persons or clients of any financial adviser assisting in the placing which does not involve an offer to the public or to existing holders of company’s securities | An issue of new shares by the company to the seller of an asset or assets in consideration for the acquisition by the company of that asset or assets (NOT FOR CASH) |
Advantages |
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Disadvantages |
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Why offer shares at a discount?
More attractive for existing shareholders to take up the offer
There is no limit on the discount but must be above nominal value in accordance with the CA 2006
Commercial drivers behind a rights issue?
Pay of a debt
Buy an asset
Increase a bank balance
Improve gearing that might enhance the company’s ability to borrow
Risks of a rights issue?
Not all the shares may be taken up
Potential reduction in share price
Company might not pay dividends in the future
No nil-paid rights may develop which can prevent shareholders trading them in the future
Timetable of a rights issue
Date | Application | |
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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
Prospectus
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14 clear days (between Impact day and GM) = 18 calendar days |
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2 business days before D day |
Detail on the application for admission (not needed in timeline question) (by submitting ‘48 hour’ documents to FSA under the Listing Rules, and ‘two- day’ documents to the Stock Exchange under the Admission and Disclosure Standard). | |
General Meeting | GM to pass all resolutions
Must hold GM before sending out PALs because FSA cannot make the admission to listing ‘conditional’ upon any event (LR 2.2.2(3)), 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) Immediately following GM
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One business day after GM – D Day | D-Day:
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10 business days or 14 non-clear/ calendar days after posting of PALs (PALs posted on GM day) | If pre-emption rights NOT disapplied
If pre-emption rights are disapplied
NB. Under a rights issue most co.s will want to disapply the pre-emption rights because of fractional... |
Buy the full version of these notes or essay plans and more in our Public Companies and Equity Finance Notes.
A collection of the best LPC Equity Finance notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through twenty-nine LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short these are what we believe to be the strongest set of Equity Finance notes available in the UK this year. This collection of notes is fully up...
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