Rights issues
 

Is a share issue aimed at the company's existing shareholders. This form of issue secures the company's existing owners from dilution and is often seen as a shareholder-friendly issue. These rights issues often have "guarantors" who cover for x number of procentages of the new shares to be printed.

 

Companies practice guarantors in case the existing shareholders do not want to subscribe, or do not have enough funds to subscribe for all the shares they have been allocated. The use of guarantors then becomes a security solution for companies that want to bring in all the capital they envisioned before the issue was put up.

Such guarantors are often large institutional investors, larger companies, or funds.

rights issue issue rights issue