share issue


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Related to share issue: bonus shares

share issue

the process of issuing shares in a JOINT-STOCK COMPANY.

New share capital is most frequently raised through issuing houses or merchant banks which arrange for the sale of shares on behalf of client companies. Shares can be issued in a variety of ways, such as direct to the general public by way of an ‘offer for sale’ (or an ‘introduction’) at a prearranged fixed price; an ‘offer for sale by TENDER’ where the issue price is determined by averaging out the bid prices offered by prospective purchasers of the share subject to a minimum price bid; a RIGHTS ISSUE of shares to existing shareholders at a fixed price; or a placing of the shares at an arranged price with selected investors, often INSTITUTIONAL INVESTORS. See INITIAL PUBLIC OFFERING.

Where shares are issued by means of an offer for sale the company issues a PROSPECTUS inviting members of the public to subscribe for shares, such applications for shares being accompanied either by a proportion of the purchase price of the shares or by the full purchase price. Then the company arranges for the ALLOTMENT of shares to intending shareholders. If the share issue is oversubscribed with more applications for shares than the number of shares being issued, then the firm must use some formula to allocate shares among applicants. To cover for the possibility that the share issue will be undersubscribed companies usually contract with a merchant bank to have the issue underwritten, the bank purchasing any unsold shares. Successful applicants then pay any balance of the share price or a second instalment towards the final price in response to a ‘call’ by the company. At this stage the names of successful applicants are entered on the company's SHARE REGISTER and they become entitled to full shareholders' rights, including the right to receive ANNUAL REPORTS AND ACCOUNTS and to vote at the company's ANNUAL GENERAL MEETING. See STOCK MARKET, CALLED-UP CAPITAL, PAID-UP CAPITAL, ALLOTMENT, SHARE CERTIFICATE.

share issue

the process of issuing shares in a JOINT-STOCK COMPANY. New share capital is most frequently raised through issuing houses or merchant banks, which arrange for the sale of shares on behalf of client companies. Shares can be issued in a variety of ways, including: directly to the general public by way of an ‘offer for sale’ (or an ‘introduction’) at a prearranged fixed price; an ‘offer for sale by TENDER, where the issue price is determined by averaging out the bid prices offered by prospective purchasers of the share subject to a minimum bid price; a RIGHTS ISSUE of shares to existing shareholders at a fixed price; or aplacing of the shares at an arranged price with selected investors, often INSTITUTIONAL INVESTORS.

Where shares are issued by means of an offer for sale, the company issues a PROSPECTUS inviting members of the public to subscribe for shares, such applications for shares being accompanied either by a proportion of the purchase price of the shares or the full purchase price. Then the company arranges for the ALLOTMENT of shares to intending shareholders. If the share issue is oversubscribed, with more applications for shares than the number of shares being issued, then the firm must use some formula to allocate shares between applicants. To cover for the possibility that the share issue will be undersubscribed, companies usually contract with a merchant bank to have the issue underwritten, the bank purchasing any unsold shares. Successful applicants then pay any balance of the share price or a second instalment towards the final price in response to a ‘call’ by the company At this stage the names of successful applicants are entered on the company's SHARE REGISTER and they become entitled to full shareholders’ rights, including the right to receive ANNUAL REPORTS AND ACCOUNTS and to vote at the company's ANNUAL GENERAL MEETING.

See STOCK EXCHANGE, CALLED-UP CAPITAL, PAID-UP CAPITAL, ALLOTMENT, SHARE CERTIFICATE, SHARE PREMIUM, SHARE BUYBACK, INITIAL PUBLIC OFFERING.

References in periodicals archive ?
This directed share issue is in accordance with the placing agreement with Carnegie Investment Bank AB in order to finance the accelerated growth and intensify participation in the on-going market expansion.
The Board intends to effect the bonus share issue to double the amount of the Company's issued share capital.
The shares to be subscribed in the share issue correspond to approximately 29.
The proceeds from the share issue strengthen Nocom's financial position and enable increased investments in the company's growth areas, said Stefan Strom, CEO of Nocom.
The share issue was led by GlaxoSmithKline's independent life science fund SR One.
The share issue is directed to a limited group of investors.
The rating on the share issue reflects the issue's subordinated status, interest deferral clause, and restriction on payments from retained profits.
The proceeds from the share issue will be used to finance investments in selected prospecting areas.
The share issue was oversubscribed by approximately four times.
The share issue will be directed to a limited number of financial institutions and other professional investors.
C Technologies' subsidiary Anoto AB is implementing a new share issue that will provide Anoto with approximately SEK 600 million.
M2 EQUITYBITES-March 15, 2018-Fiskars' board decides on directed share issue without consideration as share rewards to personnel