An emergency measure introduced at the onset of the pandemic to allow companies to exclude existing shareholders from major fundraisings is to end on 30 November.

Back in March, as the coronavirus brought economic activity to a halt, the Pre-Emption Group informed UK-listed companies they could issue up to 20% of their share capital to raise fresh funds without giving existing shareholders first refusal, thus bypassing their pre- exemption rights.

Previously, the maximum fundraising a company could conduct without granting pre-exemption rights was 5% of their share capital and an extra 5% if the funding was for an acquisition or investment.

While this additional flexibility was welcomed by cash-strapped companies, many retail investors opposed the new rules as they were excluded from taking part in heavily discounted, highly dilutive             share issues.

Though considerable economic uncertainty remains, PEG argues companies have had eight months to assess their situation and respond accordingly.

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