WAPIC Insurance Nigeria: When did shareholders now mean bag holders?
Dear Readers: Rights issues have become more popular in Nigeria after the 2008 - 2009 equities market crash in Nigeria. As companies became more wary of public offers and the extra scrutiny that now came with it, rights issues became the lesser evil. The drastic decline in stock prices across the market also made public offers less appealing to investors regardless of company clout. Companies resorted to rights issues as the best way to still raise equity without being overly scrutinized and increase chances of a successful capital raise from within (existing shareholders.) How hard should it be to convince existing shareholders to buy more shares of a company they already own at a discount to the current market price ? Rights issues are supposed to serve as an interim reward to shareholders; while, giving them a chance to maintain their ownership stake in the company. The company they own also has a formal path to raise needed equity capital. Th