With limited investor appetite for new equity or debt securities, rights offerings have become the method of choice for Asian issuers to raise capital. More than many forms of securities, rights offerings are subject to extensive and often idiosyncratic regulation in Asia. As a result, a structure that works in one Asian jurisdiction may not be feasible in another.
Market participants and regulators have been reviewing aspects of the different regulatory regimes. If it were possible, the conversion of local regulatory regimes to a more consistent structure would enhance the attractiveness of rights offerings.
A rights offering is an offering by a company to its existing shareholders that gives each the right to purchase new shares in the company, in proportion to existing ownership, at a discount to the market price – these shares are rights shares. Shares that are not taken up, but are subscribed for by existing shareholders...