| gen. |
rights issue (An issue of new shares in a company which are first offered to existing shareholders in proportion to their present holdings: shareholders are entitled but not obliged to take up their rights. Where the issue price is below the market price of the shares, it may be possible to sell the rights. If rights are not taken up, the shares are sold in the market, and shareholders receive the excess if the shares fetch more than the issue price. The advantage of a rights issue as a means of raising capital is that the register of present shareholders provides a ready-made list of people who have already shown some interest in a company. OE Alexander Demidov); private placement (The sale of a new issue to a few large institutional investors without registering with the SEC. A private placement is exempt from SEC registration, subject to certain restrictions, because it is not offered to the general public. In order to make a private placement, the issuer must file a private placement memorandum (PPM), which explains exactly why the issue complies with SEC Regulation D exempting certain companies from registration; this is done to protect both the issuer and the investors. According to Regulation D, a PPM must contain a complete description of the security and the terms of the sale. It must also include applicable information about the issuer's financial situation and applicable risk factors. Private placement is also called direct placement. Farlex Financial Dictionary. © 2012 Farlex, Inc. Alexander Demidov); private offering (An investment offered to a small group of investors. Section 4(2) of the federal Securities Act exempts from registration "transactions by an issuer not involving any public offering." What qualifies as "not involving any public offering"is complicated and differs depending on a wide variety of circumstances. Generally, Regulation D (Rules 501 through 508) provides a safe harbor. If the issuer follows the rules for the circumstances described in Regulation D,then the issuer won't get in trouble. The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 Alexander Demidov) |
