Justifying share issuance schemes

Companies also use the issuance of new shares to raise capital via a rights issue exercise to enable the company to raise funding needs for potential acquisitions or working capital purposes or even to pare down borrowings.

ONE of the reasons for a company to be listed on the stock exchange is to tap the capital market for future expansion of its business.

This can be in the form of the issuance of new shares as a consideration in a transaction.