Timetable for Rights Issue

Question 1

Rights Issue: Procedure where no GM is required

Answer 1

• Company simply needs to comply with LR 9.5.6R: the rights issue must remain open for acceptance for at least 10 business days, starting with the date on which the offer is first open for acceptance.
• So, timetable if no GM is required to be held:
  1. Latest day to submit Prospectus PRR 3.1.6R(2)(a): 10 working days prior
  2. Sign underwriting agreement
  3. Impact Day of the rights issue: Day 0
  a) Issue announced through an RIS: LR 9.5.5R(1)
  b) the prospectus published; and
  c) the PALs posted to shareholders.
  4. Trading day after Impact Day: Day 1
  a) Shares admitted to listing and trading in “nil paid” form (at 8am)
  b) The stock accounts of the company’s CREST shareholders are credited with the appropriate number of nil paid rights
  c) Offer now open for acceptance
  5. Last day for acceptance: day after 10 business days i.e. the 11th business day: LR 9.5.6R
  N.B. As the offer must be open for 10 full business days (LR 9.5.6R), and rights issues usually close for acceptance at 11am, the offer cannot close until the 11th business day (at 11 AM)
  6. Sale of rump – 2nd dealing day after last date for acceptances
  7. Notify RIS LR 9.5.5R(2) (2nd dealing day after AD)
  8. Purchase of stick (5th dealing day after AD)

Question 2

Rights Issue: Procedure where a GM is required: options?

Answer 2

• Option 1 convene the GM it requires to pass the s.551 CA 2006 ordinary resolution and comply with s.561 CA 2006 by following the procedure set out in s.562 CA 2006 (i.e. the “Gazette Route”); or
• Option 2 convene the GM it requires to pass the same ordinary resolution but also to pass a special resolution to disapply pre-emption rights under s.570 CA 2006 or s.571 CA 2006 (i.e. the “Disapplication Route”).

Question 3

Option 1 – Gazette Route – follow s. 562

Answer 3

1. Latest day to submit Prospectus PRR 3.1.6R(2)(a): 10 working days prior
2. Sign underwriting agreement
3. Impact Day: Day 0:
   • Announcement to RIS: LR9.5.5R(1) prospectus
   • Prospectus approved and published
   • Separate circular posted - – though notice of GM often incorporated in the prospectus.
4. Date of GM – Day 17
   • 2 days posting (1147(2) CA) and 14 clear days’ notice (307(a)(1)(a)) and s. 360 (provided a longer period not specified in the articles – s. 307A(6)
   • Immediately after GM: PALs posted
5. Trading day after GM – Day 18
   • Gazette Notice published

• CREST accounts credited (8am) and PALs sent out - only be after SH approval has been obtained. This is because trading in nil paid rights can only take place once shareholder approval has been received to avoid any completed trades in the nil paid rights having to be undone.
• Shares admitted to trading in nil paid form and to listing (8am)

• Offer now open for acceptance
6. Last date for acceptance and payment – Day 32
• 14th day after statutory offer period: 562(5)
• Offer will usually close at 11m.
• Note: 10 full business days required: LR 9.5.6R
This is is likely to be as long as, or possibly longer than, the 14 calendar day minimum offer period under s.562(5) CA 2006 (although this will depend on when the statutory offer period starts to run under s.562(5)).

Question 4

Option 2: Disapplication Route

Answer 4

1. 10 working days prior to ID - Latest day to submit Prospectus PRR 3.1.6R(2)(a).
2. Sign underwriting agreement
3. Impact Day – Day 0
   • Announcement made to RIS: LR 9.5.5R(1))
   • Prospectus approved and published
   • Separate circular (if used) posted – though notice of GM often incorporated in the prospectus.
4. Date of AGM – Day 17
   • 2 days posting (1147(2) CA) and 14 clear days’ notice (307(a)(1)(a)) and s. 360 (provided a longer period not specified in the articles – s. 307A(6)
   • Immediately after GM: PALs posted
5. Trading day after GM – Day 18
   • CREST accounts credited and PALs sent out – can only be after SH approval has been obtained. This is because trading in nil paid rights can only take place once shareholder approval has been received to avoid any completed trades in the nil paid rights having to be undone.
   • Shares admitted to trading in nil paid form and to listing

• Offer now open for acceptance

6. Approximate Last Date for Acceptance and Payment – Day 32
   • Being the day after the 10th business day: LR 9.5.6R
   • Fractional entitlements and shares sold on behalf of overseas SH – done by AD
   Not sure you need below
7. Second dealing day after AD
   • Sale of rump
   • Notify RIS LR 9.5.5R(2) (2nd dealing day after AD - see LR 9.6.6R)
8. 5th dealing day after AD
   • Purchase of stick