Homepage
PR Newswire
17-01-2024, 01:08 PM
Hi CY09,
Normally for preferential offers, the discount will be quite tight because it is not in the interest of those shareholders who did not/unable to take up the offer. They cannot sell nil paid rights in the market like a rights issue.
Furthermore, if you have support from substantial shareholders for the issue, then it makes no sense to make the discount larger just to attract more minorities to subscribe. After all, the issue is to raise funds for the company and they have already that certainty on how much to raise with undertakings and backstop.
Normally for preferential offers, the discount will be quite tight because it is not in the interest of those shareholders who did not/unable to take up the offer. They cannot sell nil paid rights in the market like a rights issue.
Furthermore, if you have support from substantial shareholders for the issue, then it makes no sense to make the discount larger just to attract more minorities to subscribe. After all, the issue is to raise funds for the company and they have already that certainty on how much to raise with undertakings and backstop.