Rights Issue

Rights Issue Issue of shares at par or at a premium by an existing company to its shareholders in a certain proportion (and additional shares, if available) to their holdings, as a matter of their right to receive preferential treatment. An existing shareholder, instead of subscribing to such an issue, can let his rights lapse, or renounce his rights in favour of another person (free, or for a consideration) by signing the renunciation form. The renouncer may or may or may not have the right to apply for shares additional to his entitlement, depending upon the terms the company attaches to the renunciation of rights.

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