HK exchange makes rights issues more efficient

Author: | Published: 1 Oct 2009
“A minority shareholder that’s fast asleep should not be able to cripple a capital raising”

In a bid to help troubled companies raise money, the Hong Kong stock exchange is set to streamline rights issues and open offers by reducing the notice period for book closure.

Under the present rules, investors have 14 calendar days to sell their interest before they become party to a company's secondary offer. The exchange wants to reduce this to five business days to help cash-strapped companies access funds more quickly.

"A minority shareholder that is fast asleep should not be able to cripple a company's capital raising," said Keith Johnson at Linklaters. "Were the permitted discount on open offers...