Private Placement and Rights Issue Cycles

2016 ◽  
Author(s):  
Adrian Melia ◽  
Howard Chan ◽  
Paul Docherty ◽  
Steve Easton
Keyword(s):  
Private Placement ◽  
Rights Issue

Rencana Aksi Korporasi private placement yang Dilakukan oleh PT. SLJ GLOBAL, Tbk. terhadap CARRIEDO Limited

2020 ◽  
Vol 2 (2) ◽  
pp. 215
Author(s):  
Arvi Alvianda
Keyword(s):  
Development Strategy ◽  
Research Method ◽  
Business Development ◽  
Public Companies ◽  
Share Ownership ◽  
Private Placement ◽  
Corporate Action ◽  
Percentage Share ◽  
Rights Issue ◽  
Debt Payment

One of the most important elements in the framework of the business development strategy of public companies (issuers) is the addition of capital. The addition of capital can be done in two ways, namely Capital Increase by providing Pre-emptive Rights and Capital Additions without Giving Pre-emptive Rights. Providing Rights is the same as Rights Issue, while without giving Rights can be equated with Private Placement. However, generally people are more familiar with calling private placement with the term Right Issue without Preemptive Rights. Arrangements regarding Preemptive Rights are regulated in POJK No.32/POJK.04/2015 concerning Addition of Company Capital By Providing Pre-emptive Rights, while without providing Preemptive Rights is regulated in POJK No.38/POJK.04/2014 concerning Capital Increase of Public Companies without Giving Pre-emptive Rights. The research method is used a normative juridical method. The research specifications are used descriptive-analytical. From the results of the study it can be concluded that the Capital Increase without Giving Preemptive Rights is carried out by PT. SLJ GLOBAL Tbk, by issuing new shares to creditors as a form of debt payment is one of the best ways for the Company. This method proved to be able to reduce debt and increase the paid up capital of the Company, as well as making the Creditor as a new shareholder. However, corporate action through the issuance of new shares without giving HMETD, so that there are additional new investors, resulting in a percentage share ownership of each of the existing shareholders has decreased. (Dilution).

Choice between rights issue and private placements of equity and the role of information asymmetry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bipin Sony ◽  
Saumitra Bhaduri
Keyword(s):  
Information Asymmetry ◽  
Private Equity ◽  
Emerging Market ◽  
Content Type ◽  
Private Placement ◽  
Private Placements ◽  
Rights Issue ◽  
The Impact ◽  
Role Of Information

PurposeThe objective of this paper is to investigate the role of information asymmetry in the equity selling mechanisms chosen by the firms from an important emerging market, India. Specifically, the authors look into the choice between the two most popular mechanisms of equity issues – rights issue and private placement of equity.Design/methodology/approachThis study introduces three analyst specific variables as proxies of information asymmetry as the conventional proxies are fraught with several disadvantages. First, the paper tests the choice between rights issue and private placement using a binary logistic model. In the second approach the authors use rights issue and segregate the private placements into preferential allotments and qualified institutional placements and test the impact of information asymmetry using a multinomial logistic regression.FindingsThe outcome of this empirical exercise shows that only those firms facing lesser information problems choose rights issue of equity. Private placements are chosen by firms facing higher information problems to circumvent information costs. The results remain invariant even after segregating the qualified institutional placements from private equity placement as the firms with information disadvantage choose to place equity privately.Originality/valueIn contrast to the conventional studies that focus on the debt-equity framework, the authors argue that the impact of information asymmetry is applicable even at disaggregated levels of equity selling mechanism.

Earnings Management and Capital Resource Allocation: Evidence from China's Accounting-Based Regulation of Rights Issues

2004 ◽  
Vol 79 (3) ◽  
pp. 645-665 ◽  
Author(s):  
Kevin C. W. Chen ◽  
Hongqi Yuan
Keyword(s):  
Resource Allocation ◽  
Earnings Management ◽  
Listed Companies ◽  
Return On Equity ◽  
Rights Issue ◽  
Rights Issues ◽  
Over Time ◽  
Do So

From 1996 to 1998, listed companies in China were required to achieve a minimum return on equity (ROE) of 10 percent in each of the previous three years before they could apply for permission to issue additional shares. As a result of this rule, there was a heavy concentration of ROEs in the area just above 10 percent. We show that the Chinese regulators appear to have scrutinized firms using excess amounts of nonoperating income to reach the 10 percent hurdle. In addition, their ability to do so seems to have improved over time, which allows them to be better able to identify firms that subsequently performed better. However, many firms were still able to gain rights issue approval through excess nonoperating income. We show that these firms subsequently underperformed other approved firms that did not use the same practice, indicating that the Chinese regulators' objective of guiding capital resources toward the well-performing sectors is partially compromised by earnings management.

Private Placements in the Capital Markets Union

2018 ◽  
Author(s):  
Frank GB Graaf
Keyword(s):  
Capital Markets ◽  
Alternative Source ◽  
Private Placement ◽  
Private Placements ◽  
Capital Markets Union

This chapter looks at recent initiatives in the context of the European Commission's flagship plans for a Capital Markets Union (CMU) designed to encourage a pan-European private placement market. In reality, private placements are mainly available as a funding tool for medium-sized and larger companies. Nonetheless, private placements are regarded by CMU's policymakers as an alternative source of long-term funding, which is simple enough for smaller corporates and small and medium-sized enterprises (SME), and with benefits that they might find attractive. The Commission's initial intention in the design of a CMU was to enable a greater use by SMEs of private placements.

Sign in / Sign up

Export Citation Format

Share Document