The Biggest Rights Issue in UK history

, ,

F9 and P4 students should be aware that there are a variety of ways to raise finance (see chapter 4 of our free F9 ExPress notes. One method is by way of a rights issue where a company issues new shares and sells them to existing shareholders. Shareholders are not obliged to buy them but merely have the “right” to buy them. By being given the “right” they have the security of knowing that their shareholding won’t be diluted by shares being issued to other shareholders without first being offered them.

The Lloyds Banking Group has recently announced the UK’s largest ever rights issue and the bank hopes to raise over £13 billion. Press reports state that the main reason behind the rights issue is to raise sufficient funds to avoid the bank having to take part in the government’s banking insurance scheme that was set up after the recent banking troubles in the UK.

This is going to be an interesting one to watch. Lloyds has nearly 3 million shareholders with the majority being private shareholders. Whether or not these shareholders will be willing to take up these rights remains to be seen. They are due to meet to approve it this coming Thursday. In the run up to the exam though I’m sure students will have more to worry about than the outcome of this vote but make sure you’re aware of the various finance raising methods for the exam!

An Apple for 100 Companies..

Whilst a lot of companies around the world are struggling or going out of business due to the Covid-19 pandemic, some are doing very well.[..]

Cows vs. oats

Things are changing in the milk business. Or rather, I should say things are changing in the dairy milk and vegan milk business. Over the[..]

Big Mac with 4 sides

We blogged last year about the former boss of McDonald’s being fired due to a relationship with a colleague but it turns out, there may[..]

Rocking along nicely...

Years ago, advertising largely used to be based around TV, radio, magazines and newspapers. Then the Internet came along and changed things dramatically. One of[..]

Flying high with creativity.

Sometimes a little bit of creative thinking can go a long way. This bit of creativity though went a very long way indeed. Creativity can[..]