oversubscription privilege

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Oversubscription privilege

In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not taken up.

Oversubscription Privilege

In a new issue of a stock, the right of current shareholders to receive or purchase the rights or warrants to the new issue at a discount. This allows existing shareholders to maintain their current percentage of ownership in the company. The rights or warrants that are distributed are the rights some shareholders did not want to receive. Thus, these remaining rights or warrants are distributed among existing shareholders on a prorated basis. See also: Anti-dilution provision.

oversubscription privilege

The opportunity to purchase, on a pro rata basis, any remaining shares not already subscribed to in a new stock offering. In a typical new offering using stock rights, new shares are priced below the market price in order to ensure a successful sale. Generally, however, some stockholders will neither use nor sell their rights to buy the new shares, thus leaving some stock unsold even at the bargain price. The issuer therefore allows the stockholders to oversubscribe in anticipation of extra available shares. It is generally in the stockholder's interest to use the oversubscription privilege. Compare subscription price.
References in periodicals archive ?
EGT Entertainment Holding Limited, a wholly-owned subsidiary of Melco International Development Limited ("Melco") and the Company's largest stockholder, subscribed for 27,777,673 shares by exercising its basic and oversubscription privileges.
8m with oversubscription privileges, of convertible subordinated debentures which will pay interest at nine percent until conversion, redemption or maturity.
Farmers") (OTCBB: FMNB), the holding company for The Farmers National Bank of Canfield, Ohio, announced that 2,058,315 common shares were subscribed for in the rights offering and that all basic subscription rights and oversubscription privileges have been accepted.
collectively, the "Standby Purchasers"), subscribed for 11,060,478 shares of the Company's common stock, or approximately 79% of the 14 million shares available, pursuant to their basic and applicable oversubscription privileges.
05 per share offering price through the exercise of both basic and oversubscription privileges in the rights offering.
Shareholders of record on January 3, 2006, will have the right to participate in the offering on a pro-rata basis, with oversubscription privileges in the event the rights offering is not fully subscribed.
In addition, they will exercise their oversubscription privileges in full to purchase all remaining shares, which are not otherwise purchased by other shareholders through the exercise of rights or the oversubscription privilege.
The rights will be non-transferable and will have customary oversubscription privileges, provided that purchases through the rights offering will not be permitted to cause an individual shareholder's aggregate ownership of the Company's common stock to exceed 4.
Stockholders who exercise their basic subscription rights in full will also have oversubscription privileges.
Nephros' stockholders subscribed for 99,297,082 units in its previously announced rights offering and Nephros accepted all basic subscription rights and oversubscription privileges.
Chairman Michael Smith said, "The preliminary tabulations provide that we have received subscriptions and requests for oversubscription privileges for an aggregate of 19,011,407 Shares, which would have amounted to approximately USD$125.
or Steel Partners, the Company's largest stockholder, subscribed for 86,309,098 shares of the Company's common stock for an aggregate purchase price of approximately $120,832,737, pursuant to its basic and applicable oversubscription privileges.