Following the Office of Fair Trading market study and the Rights Issue Fees Inquiry report into equity underwriting, the Institutional Investor Committee published the its “Best Practice Guidance for Issuers when Raising Equity Capital” guide (‘the Guide’). It is hoped that the Guide will assist boards in preparing for future equity issues ensuring best practice is adopted.
The Guide has been broken into four key sections:
• background preparation;
• when the need for capital raising exercise is foreseen;
• processes in raising equity; and
• post completion issues.
The Committee will be keeping a close eye on future rights issues ensuring the Guide has been followed. It has also indicated that the Guide is the first stage in the work it will be undertaking to follow up the recommendations of the Rights Issue Fees Inquiry report.
Professional advisors should assist boards in:
• providing training to directors on the secondary issue process;
• investor relations teams should ensure that discussions with shareholders cover the points suggested by the Guide; and
• a reassessment of corporate broker appointment.
For further information please contact Jeremy Orrell from our Corporate team on 0844 391 5829.