rights offer

[Golding]

can any bof pls explain to me what is meant b a rights offer. e.f - Faritec declared a rights offer ans made a rights offer share available to existing share holders.What does this mean?

[SimonPB]

you will get nil paid letters that you can either sell or use to buy discounted shares ..

[Golding]

Simon Pls, you will get nil paid letters...!More detail pls. u must understand I'm new at the game?

[TOPIX]

Follow this link http://www.investopedia.com/terms/r/rightsoffering.asp

[SimonPB]

check on the menu ==> help and educaztion ==> educational newsletter .. find the issue that covers npl's ..

[olilau]

golding, a rights offer is basically when a company issues a fresh batch of shares to only the existing shareholders pro rata to their existing holding, usually at a discount. it is a way for companies to raise additional capital to for instance restructure their debts. supergroup is an example - they announced a rights offer yesterday. what simon and the guys are saying is that above very general explanation is ok for discussion around the coffee table, but it is technical and complex topic that requires you to read up. no way around that.

[saash]

What do other's think of this one? Faritech share is not performing, even though the company seems to be doing better financially. D:E ratio is good, so is interest cover. NAV & Cash/sh are up. Return on s/h funds and on assets up. I don't entirely understand though, why are they doing a rights offer pretty much at trading price per share? More importantly, how are they freeing up the extra portion of cash for financing this activity? I have a small holding in this pathetic company, and I'm not too happy about all that's going on.