Innovation in the autumn

Author: | Published: 1 Jul 2009

Nicholas Pettifer
Senior staff writer

From 1998 to 2007 UK main market companies completed over 220 rights issues raising approximately £34.9 billion ($57.2 billion). Yet in only the first four months of this year a mere 14 raised approximately £21.8 billion.

While panellists on the IFLR and Herbert Smith web seminar (webinar) on equity capital raising said instructions have slightly tailed off, they agreed rights issues will return strongly in the autumn. In particular, there will be more innovative structures such as private investments in public equity (Pipes), convertible bonds and strategic investments running alongside rights issues.

"More sectors are likely to follow on from the banks, real estate companies and, increasingly, retailers," said Robert Farrer-Brown, general counsel at Lazard. "Given that it is unlikely bank lending will return to levels where capital raising is not required, rights issues will remain the most popular method...