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BOI Recapitalisation Plan

  • 26-04-2010 3:01pm
    #1
    noodler
    Registered Users, Registered Users 2 Posts: 26,734 ✭✭✭✭


    Can anyone distinguish between The rights issue and the placing?

    Best I can summarise is that the rights issue is the offer of new shares to exisitng holders at a discounted price. These shares must be purchased if the holder wants to maintain his/her existing stake - otherwise they will see their stake diluted.

    Meanwhile, the placing is the selling of securities (shares), uually to institutional investors.

    What is the difference? Is the placing the selling of shares which are refused by the shareholders in the rights issue?


Comments

  • #2
    Économiste Monétaire
    Closed Accounts Posts: 2,208 ✭✭✭Économiste Monétaire


    A private placement is usually marketed to large-scale institutional investors (through an IB on the issuers behalf). In a rights issue, to buy these new shares you need to already own stock in the company and it acts as a kind of option on the stock you already have. In a private placement, I don't believe previous ownership is a prerequisite to buying the new issuance and shares sold through this mechanism aren't traded on the stock exchange.


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