Britain calls halt to relaxation of rules on fundraising share issues

LONDON, Nov 20 (Reuters) – Britain’s listed companies will
have to resume first-refusal rights to existing shareholders
when they raise capital from the start of December, the
Financial Reporting Council (FRC) said on Friday.

The so-called pre-emptive rights were eased in March to
speed up capital-raising for companies hit by COVID-19 and
facing Britain’s worst downturn in 300 years.

“Market activity over the past eight months has shown that
investors were clearly in favour of companies having access to
the capital they needed quickly to maintain their solvency
during this unprecedented economic downturn,” FRC-based
Pre-Emption Group (PEG) said in a statement.

The relaxation in pre-emption rights will not be extended
beyond the end of November, PEG said.

More than 30 billion pounds ($39.79 billion) was raised on
UK stock markets during the first six months of the pandemic as
companies shored up their finances.

PEG said it will gather “insights” to feed into a UK listing
rules review launched on Thursday in an effort to ensure London
remains an attractive place for companies to issue shares.
($1 = 0.7540 pounds)

(Reporting by Huw Jones
Editing by David Goodman
)

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