Preemptive Right

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Preemptive Right

The privilege of a stockholder to maintain a proportionate share of the ownership of a corporation by purchasing a proportionate share of any new stock issues.

In most jurisdictions, an existing stockholder has the right to buy additional shares of a new issue to preserve Equity before others have a right to purchase shares of the new issue.

preemptive right

n. the right of a shareholder in a corporation to have the first opportunity to purchase a new issue of stock of that corporation in proportion to the amount of stock already owned by the shareholder. (See: corporation, stock)

References in periodicals archive ?
or a preemptive right in the nature of a right of first refusal in gross with respect to an interest in land .
In order to participate in the Capital Purchase Program, the Company will seek the approval of shareholders at the Special Meeting to eliminate preemptive rights from the Articles of Organization.
Moreover, the Investors agree in their subscription agreements to subscribe to additional shares in addition to those guaranteed by the assignment of preemptive rights through the reserve of unsubscribed shares, in the event that there are remaining unsubscribed shares.
Marfrig's shareholders can exercise their preemptive rights in up to 30 days, starting from the date of the notice to the market, and shareholders must pay the shares within this period.
The offer price is to be determined after the preemptive rights expiration.
2% of the shares offered, were subscribed for in connection with the preemptive rights offering.
Nasdaq:INKP) today announced that the Philadelphia Court of Common Pleas entered a final judgment order approving the settlement of InKine's class action litigation related to the denial of certain claimed preemptive rights.
In addition, for one year or the period of the London Arbitration Court's investigation into the issuance of new VimpelCom shares in Telenor's favour, Altimo agreed not to take any actions which could dilute Telenor's stake below a simple majority and to take all necessary actions to facilitate VimpelCom's preemptive rights exercise, if the arbitration tribunal supports Telenor.
Since then, Telenor has been seeking to enforce what it considers the exercise of its preemptive rights.
Calichera") has successfully completed the placement of the stock corresponding to its capital increase through shareholders' preemptive rights, which was launched on August 2, 2007.
Telenor has already indicated that it will seek to use the preemptive rights that it allegedly has regarding the planned share issue.
The preferred shares were initially offered to Bancolombia shareholders in a preemptive rights offering conducted in Colombia, and subsequently offered exclusively outside of Colombia in the form of American Depositary Shares ("ADSs").