When doing a Secondary Market Offering of shares to raise money, a
company can opt for doing a rights issue to raise capital. 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. A rights issue is offered to all existing
shareholders individually and may be rejected, accepted in full or (in
a typical rights issue) accepted in part by each shareholder. Rights
are often transferable, allowing the holder to sell them on the open
market.
Rights can be renounceable (can be sold separately from the share to
other investors during the life of the right) or non-renounceable
(shareholders must either take up the rights or let them lapse. Once
the rights have lapsed, they no longer exist).
To issue rights the financial manager has to consider:
* Subscription price per new share
* Number of new shares to be sold
* The value of rights
* The effect of rights on the value of the current share
* The effect of rights to existing and new shareholders
A right to a share is generally issued on a ratio basis (e.g.
one-for-three rights issue). Because the company is getting the
shareholders' money in exchange for issuing rights, a rights issue is
a source of funds for the company issuing it.
Rights issues may be underwritten. The role of the underwriter is to
guarantee that the funds sought by the company will be raised. The
agreement between the underwriter and the company is set out in a
formal underwriting agreement. Typical terms of an underwriting
require the underwriter to subscribe for any shares offered but not
taken up by shareholders. The underwriting agreement will normally
enable the underwriter to terminate its obligations in defined
circumstances. A sub-underwriter in turn sub-underwrites some or all
of the obligations of the main underwriter; the underwriter passes its
risk to the sub-underwriter by requiring the sub-underwriter to
subscribe for or purchase a portion of the shares for which the
underwriter is obliged to subscribe in the event of a shortfall.
Underwriters and sub-underwriters may be financial institutions,
stock-brokers, major shareholders of the company or other related or
unrelated parties. The Panel's guidance covers both non-underwritten
and underwritten rights issues.
Best wishes
Ara_sakul@yahoo.
--- In forum-pajak@
<natasia_rompies@
>
> Dear All,
>
> mohon bantuannya mengenai perpajakan untuk right issue, karena
> perusahaan tempat saya kerja ada rencana mengeluarkan saham baru.
>
> Thanks a lot.
>
PERHATIAN
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