Rights Offerings

A Rights Issue is a financing option that a company can opt for to raise capital under a seasoned equity offering of shares to raise money. The Rights Issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm at a specified price within a specified time.

How It Works

A Rights Issue is directly offered to all shareholders of record and through intermediary agents (i.e. the transfer agent for the issuer or Broker Dealers holding shares on behalf of beneficial shareholders). Subscription Rights may be exercised in full or partially. Subscription rights are issued as a transferable certificate, allowing the subscription-rightsholder to deal with them much like a share certificate allowing  the holder to exercise these rights or sell them on the open market. If the rightsholder wishes to exercise his/her rights, they can do so by surrendering the rights along with the requisite cash payment  in order to purchase the underlying common shares pursuant to the Rights Offering Prospectus or Offering Memorandum. A rights issuance to shareholders is generally issued as a gift of one subscription right for each one share of Common Stock held by each shareholder of record on the date of issuance  of the rights. Because the company receives shareholder’s money in exchange for shares, a rights issue is a source of Capital.

Contact Us

If you are an investor, company owner or manager that would like to learn more about how to participate in a Rights Offering feel free to send us a message on our Contact page. We’ll be happy to answer any questions you may have and to keep you posted on upcoming offerings that we think may be of interest to you.