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UK extends easing of cash call rules to help coronavirus-hit companies

Fri, 4th Sep 2020 07:45

LONDON, Sept 4 (Reuters) - Eased cash call rules have been
extended to help UK-listed companies buy a bigger share of
rights issues and aid coronavirus-hit companies raise vital
funds.

The Pre-Emption Group of finance organisations, which issues
guidance on rights issues and fundraisings, said on Friday it
would extend easing of its guidelines by a further two months to
November 30th this year.

Under normal "pre-emption" rights best practice, existing
investors have first refusal of up to 10% of a rights issue in
proportion to what they already hold. Under the eased guidelines
pre-emption rights have been doubled to 20%.

The PEG said it had decided on the extension to allow a raft
of expected equity offerings during the third quarter to take
advantage.

"By 30th November all companies will have had a reasonable
opportunity to review their liquidity requirements and as these
measures were always expected to be temporary, it is important
that we return to expectations within statement of principles
after that date," the PEG said.
(Reporting by Iain Withers; Editing by Dhara Ranasinghe)

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