Non-pre-emptive issue

Company law - good practice - listed companies - pre-emption rights - disapplication.

Pre-emption rights give existing shareholders in a company the right to subscribe for their pro rata share of any new shares in that company issued for cash.

Pre-emption rights provide existing shareholders with protection against dilution of their investments.

In this context, a non-pre-emptive issue of equity is an issue that does not include pre-emption rights for existing shareholders.

Requesting a disapplication of pre-emption rights

"A specific disapplication of pre-emption rights is one sought by a company for the purpose of an identified, proposed issuance of equity securities...

Such proposals should be considered by shareholders on a case-by-case basis...

A wide variety of financing options are available to companies. Companies should explain [to shareholders] why a non-pre-emptive issue of equity securities is the most appropriate means of raising capital, and why other financing methods have been rejected."

Statement of Principles - the Pre-Emption Group - 2022 - p10.

See also

• An introduction to equity capital
• Cash box placing
• Company law
• Dilution
• Disapplication
• Equity
• Equity capital
• Equity capital market (ECM)
• Good practice
• Intermediary
• Investor
• Issuance
• Issue
• Law
• Listed company
• Pre-Emption Group (PEG)
• Pre-emption rights
• Rights issue
• Security
• Shareholders
• Shareholders' agreement
• Statement of Principles (pre-emption rights - UK)

Other resource

• Statement of Principles - the Pre-Emption Group