Non-pre-emptive issue

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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

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