I have been asked by my management to find the different ways or options to increase the company’s issued share capital. I am told that I can increase the issued share capital by several ways like Public Offer For Sale, Restricted Offer For Sale, By Placement, By Tender Or Rights Issue. Please explain the terms

November 18th, 2009 Comments off
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Answer:

Several ways of increasing the company’s issued share capital are: 

1.0 Public Offer

  • The company invites the general public to buy shares. However, the applicants need to meet the required age ( say like 18 years old,etc), nationality and other requirements. Note that the general public is invited to apply for shares for the initial issue only.

 2.0 Placement  

  • is to place a number of company’s shares with brokers who will find the necessary buyers for the shares. Compared to public offer, it is quicker method to get cash for the company . 

3.0 Restricted Offer

  • for sale is an offer to sell to SPECIFIC persons/investors.

4.0 Tenders

  • are used when a company is unable to determine the issue price especially in the case of its public issue. So the company calls for tenders for the shares and sell to the buyers base on the price quoted by them. 

5.0 Rights Issue – refer to my detailed articles from another blog

 

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