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Hi
Can a non PLC issue a rights issue?
I am confused. A PLC will have access to the stock market where they can issue shares and raise finance. How about a non PLC? lets say I have a LTD called ABC LTD. Can I issue my existing shareholders via rights issue? Or are rights issues only allowed for PLC?.. since the shares that are sold to existing shareholders via a rights issue are at a lower price than the market?
I can think of no reason why a private entity could not raise finance from its existing shareholders
However, it would be unfair for the directors of a private entity to abuse their powers of initiating a rights issue simply to dilute the percentage holding of minority shareholders that may not be able to finance taking up additional shares.
So it would be quite normal for private entities to have a restriction imposed by the constitution preventing a rights issue unless it were approved by the holders of ALL the existing shares
OK?
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