STSM072030 - Companies and shareholders: rights issues: Provisional Allotment Letter and Renounceable Letter of Allotment
As part of the rights issue process (STSM072020), the issuing company sends a letter to all its shareholders, setting out both the terms of the offer and the deadlines by which take-up must be confirmed and subscription money paid. This letter is known as the 바카라 사이트˜Provisional Allotment Letter바카라 사이트™ (바카라 사이트˜PAL바카라 사이트™) and does not usually require any payment by the shareholders (so is said to be 바카라 사이트˜nil paid바카라 사이트™).
When a shareholder decides to take up the rights and pays the subscription monies by the required date, the PAL becomes 바카라 사이트˜fully paid바카라 사이트™. If payment is required by instalments, the PAL is said to be 바카라 사이트˜partly paid바카라 사이트™ from the time the first instalment is paid until the final instalment is paid. Once it is fully paid, the PAL is sent to the company in exchange for a share certificate for the additional shares purchased.
Sometimes a company will include a provision in the PAL enabling the shareholder to sell or 바카라 사이트˜renounce바카라 사이트™ the rights entitlements to a third party. This sort of letter is called a 바카라 사이트˜Renounceable Letter of Allotment바카라 사이트™ (바카라 사이트˜RLA바카라 사이트™). If the rights under a RLA are sold, the RLA is returned to the company and reissued to the purchaser. Where the original shareholder did not take up the offer before renouncing their rights, this is called a 바카라 사이트˜sale of rights nil paid바카라 사이트™.
Nil-paid, partly-paid and fully-paid RLAs can all be traded on the secondary market and are a chargeable security for SDRT purposes (FA86/S99(3)(c)). As it may be sold, a RLA has an inherent value, calculated as the market price of the shares post-issue minus the stated subscription price for the offer.