LONDON (Reuters) – Eased cash call rules have been extended to help UK-listed companies buy a bigger share of rights issues and aid coronavirus-hit companies raise vital funds.
The Pre-Emption Group of finance organisations, which issues guidance on rights issues and fundraisings, said on Friday it would extend easing of its guidelines by a further two months to November 30th this year.
Under normal “pre-emption” rights best practice, existing investors have first refusal of up to 10% of a rights issue in proportion to what they already hold. Under the eased guidelines pre-emption rights have been doubled to 20%.
The PEG said it had decided on the extension to allow a raft of expected equity offerings during the third quarter to take advantage.
“By 30th November all companies will have had a reasonable opportunity to review their liquidity requirements and as these measures were always expected to be temporary, it is important that we return to expectations within statement of principles after that date,” the PEG said.
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