Right issue of shares что это

rights issue

Смотреть что такое «rights issue» в других словарях:

rights issue — an issuing of extra shares. A company may raise additional capital from its members as opposed to from the public at large by issuing extra shares; this is called a rights issue. See pre emption; pre emption clause. Collins dictionary of law. W.… … Law dictionary

rights issue — rights issues N COUNT A rights issue is when a company offers shares at a reduced price to people who already have shares in the company … English dictionary

rights issue — An issue of shares for cash by a company to its existing shareholders on a basis pro rata to their existing shareholdings. The issue will normally be at a substantial discount to the current share price (usually between 20% and 40% discount). The … Financial and business terms

Rights issue — When doing a Secondary Market Offering of shares to raise money, a company can opt for doing a rights issue to raise capital. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm… … Wikipedia

rights issue — noun an offering of common stock to existing shareholders who hold subscription rights or pre emptive rights that entitle them to buy newly issued shares at a discount from the price at which they will be offered to the public later the… … Useful english dictionary

rights issue — A method by which listed companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre emption rights, according to which existing shareholders must be offered the new shares in proportion… … Accounting dictionary

rights issue — A method by which listed companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre emption rights, according to which existing shareholders must be offered the new shares in proportion… … Big dictionary of business and management

rights issue — UK / US noun [countable] Word forms rights issue : singular rights issue plural rights issues business an offer of shares at a special low price by a company to people who already own shares in it … English dictionary

rights issue — subscription rights / rights offer Privilege granted to existing shareholders of a company to subscribe to shares of a new issue against payment. Rights are often tradable in the secondary market … Euroclear glossary

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rights issue

Полезное

Смотреть что такое «rights issue» в других словарях:

rights issue — an issuing of extra shares. A company may raise additional capital from its members as opposed to from the public at large by issuing extra shares; this is called a rights issue. See pre emption; pre emption clause. Collins dictionary of law. W.… … Law dictionary

rights issue — rights issues N COUNT A rights issue is when a company offers shares at a reduced price to people who already have shares in the company … English dictionary

rights issue — An issue of shares for cash by a company to its existing shareholders on a basis pro rata to their existing shareholdings. The issue will normally be at a substantial discount to the current share price (usually between 20% and 40% discount). The … Financial and business terms

Rights issue — When doing a Secondary Market Offering of shares to raise money, a company can opt for doing a rights issue to raise capital. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm… … Wikipedia

rights issue — noun an offering of common stock to existing shareholders who hold subscription rights or pre emptive rights that entitle them to buy newly issued shares at a discount from the price at which they will be offered to the public later the… … Useful english dictionary

rights issue — A method by which listed companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre emption rights, according to which existing shareholders must be offered the new shares in proportion… … Accounting dictionary

rights issue — A method by which listed companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre emption rights, according to which existing shareholders must be offered the new shares in proportion… … Big dictionary of business and management

rights issue — UK / US noun [countable] Word forms rights issue : singular rights issue plural rights issues business an offer of shares at a special low price by a company to people who already own shares in it … English dictionary

rights issue — subscription rights / rights offer Privilege granted to existing shareholders of a company to subscribe to shares of a new issue against payment. Rights are often tradable in the secondary market … Euroclear glossary

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rights issue

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эмиссия обыкновенных акций для размещения среди существующих акционеров
Метод, используемый компаниями, акции которых котируются на фондовой бирже, для мобилизации капитала путем выпуска новых акций. Название метода происходит от принципа преимущественного права покупки (pre-emption rights), в соответствии с которым новые акции предлагаются каждому акционеру компании в количестве, пропорциональном тому количеству, которое уже находится в его собственности (предложение преимущественного права (rights offer)). Например, при выпуске таких акций в пропорции 1 к 4 каждому акционеру будет предложено приобрести одну новую акцию на каждые четыре принадлежащие ему старые акции. Поскольку при таком выпуске акций. на них обычно делается скидка с рыночной цены уже находящихся в обращении акций, те акционеры, которые не желают воспользоваться своим преимущественным правом, могут с выгодой продать его на рынке (см.: rights letter (документ на право льготной подписки на акции); renunciation (отказ от права приобретения)). См. также: excess shares (избыточные акции). Сравни: bought deal (“купленная сделка”); vendor placing (выпуск новых акций для финансирования поглощения); scrip issue (бонусная эмиссия).
[ http://www.vocable.ru/dictionary/533/symbol/97]

Тематики

4 rights issue

5 RIGHTS ISSUE

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8 RIGHTS ISSUE (GB)

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14 RIGHTS OFFER

См. также в других словарях:

rights issue — an issuing of extra shares. A company may raise additional capital from its members as opposed to from the public at large by issuing extra shares; this is called a rights issue. See pre emption; pre emption clause. Collins dictionary of law. W.… … Law dictionary

rights issue — rights issues N COUNT A rights issue is when a company offers shares at a reduced price to people who already have shares in the company … English dictionary

rights issue — An issue of shares for cash by a company to its existing shareholders on a basis pro rata to their existing shareholdings. The issue will normally be at a substantial discount to the current share price (usually between 20% and 40% discount). The … Financial and business terms

Rights issue — When doing a Secondary Market Offering of shares to raise money, a company can opt for doing a rights issue to raise capital. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm… … Wikipedia

rights issue — noun an offering of common stock to existing shareholders who hold subscription rights or pre emptive rights that entitle them to buy newly issued shares at a discount from the price at which they will be offered to the public later the… … Useful english dictionary

rights issue — A method by which listed companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre emption rights, according to which existing shareholders must be offered the new shares in proportion… … Accounting dictionary

rights issue — A method by which listed companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre emption rights, according to which existing shareholders must be offered the new shares in proportion… … Big dictionary of business and management

rights issue — UK / US noun [countable] Word forms rights issue : singular rights issue plural rights issues business an offer of shares at a special low price by a company to people who already own shares in it … English dictionary

rights issue — subscription rights / rights offer Privilege granted to existing shareholders of a company to subscribe to shares of a new issue against payment. Rights are often tradable in the secondary market … Euroclear glossary

Источник

Rights Issue of Shares

A rights issue is one of the ways by which a company can raise equity share capital among the various types of equity share capital sources available. These are slightly different from the standard issue of shares. Right shares mean the shares where the existing shareholders have the first right to subscribe the shares.

In layman terms, rights issue gives a right to the existing shareholders to purchase additional new shares in the company. Rights shares are usually issued at a discount as compared to the prevailing traded price in the market. The existing shareholders are allowed a prescribed time limit/date within which need to exercise the right or the right will thereafter be forgone.

Let us have a look at the features of the rights issue, reasons why rights shares are issued, accounting treatment of rights issue and how market price reacts post rights issue. This will help us understand the concept better.

Features of Rights Issue of Shares

Why Does a Company Issue Rights Shares?

Having looked at the features, let us look at an example of a rights issue.

Right Issue Example

No. of Right Shares to Be Received = (1000 X 2/5) = 400

New quantity of shares = 1000 + 400 = 1400

Let us look at the market price action by a company post rights issue.

Market Price Action Post Rights Issue

The price action post rights issue depends on various factors that include the reason for the issue of rights share by the company, the future prospects for the growth of the company, the industry outlook, the general market trend etc. among many other things. It, therefore, does not mean that, as the rights issue is given at discount, it may be always beneficial to the existing shareholder.

Accounting Treatment for Rights Issue

The accounting treatment for rights issue is similar to the case when ordinary shares are issued at the premium since rights issue is usually above the face value but lower than the market price. Accounting entry shall be passed as follows

To Share Capital A/c

To Share Premium A/c

Conclusion: In summation, rights issues are a way by which companies can raise equity capital by giving the existing shareholders the privilege to buy a specified number of new securities at a specified price within a specified time frame. The rights issue is different from bonus shares. While both of them are issued to existing shareholders, bonus shares are for free, whereas rights shares are usually at a discount. Rights issue also differs from the initial public offer or follow-on public offer as rights are issued to existing shareholders at a discounted price compared to market value while ordinary shares may be issued at face value or at a premium to the general public at large. 1,2

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Understanding Rights Issues

Cash-strapped companies can turn to rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. We explain how rights issues work and what they mean for the company and its shareholders.

Defining a Rights Issue

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

Key Takeaways

Until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way that they would trade ordinary shares. The rights issued to a shareholder have value, thus compensating current shareholders for the future dilution of their existing shares’ value. Dilution occurs because a rights offering spreads a company’s net profit over a larger number of shares. Thus, the company’s earnings per share, or EPS, decreases as the allocated earnings result in share dilution.

Stock Rights Issue

Why Issue a Rights Offering?

Companies most commonly issue a rights offering to raise additional capital. A company may need extra capital to meet its current financial obligations. Troubled companies typically use rights issues to pay down debt, especially when they are unable to borrow more money.

Companies with healthy balance sheets might also raise money through a rights issue to acquire a competitor or open new facilities. For a shareholder, this can create capital gains.

However, not all companies that pursue rights offerings are in financial trouble. Even companies with clean balance sheets may use rights issues. These issues might be a way to raise extra capital to fund expenditures designed to expand the company’s business, such as acquisitions or opening new facilities for manufacturing or sales. If the company is using the extra capital to fund expansion, it can eventually lead to increased capital gains for shareholders despite the dilution of the outstanding shares as a result of the rights offering.

For reassurance, a company will usually, but not always, have its rights issue underwritten by an investment bank.

How Rights Issues Work

As a shareholder, you have three options with a rights issue. You can (1) subscribe to the rights issue in full, (2) ignore your rights, or (3) sell the rights to someone else. Below we explore each option and the possible outcomes.

1. Take Up the Rights to Purchase in Full

In estimating this dilution, remember that you can never know for certain the future value of your expanded shareholding since it can be affected by business and market factors. But the theoretical share price that will result after the rights issue is complete—which is the ex-rights share price—is possible to calculate. This price is found by dividing the total price you will have paid for all your Wobble shares by the total number of shares you will own. This is calculated as follows:

2. Ignore the Rights Issue

3. Sell Your Rights to Other Investors

In some cases, rights are not transferable. These are known as non-renounceable rights. But in most cases, your rights allow you to decide whether you want to take up the option to buy the shares or sell your rights to other investors or the underwriter. Rights that can be traded are called renounceable rights. After they have been traded, the rights are known as nil-paid rights.

A rights issue can temporarily improve a company’s balance sheet, but that does not mean that management will address the underlying problems that weakened the balance sheet in the first place.

The Bottom Line

Investors may be tempted by the prospect of buying discounted shares with a rights issue. But it is not always a certainty that you are getting a bargain. In addition to knowing the ex-rights share price, you need to know the purpose of the additional funding before accepting or rejecting a rights issue. Be sure to look for a compelling explanation of why the rights issue and share dilution are necessary as part of a company’s strategic plan. A rights issue can offer a quick fix for a troubled balance sheet, but that does not mean that management will address the underlying problems that weakened the balance sheet in the first place. Shareholders should be cautious.

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