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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

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)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
Article 197 - Sale of Entitlements to Rights Issue - Shareholders have preemption rights to subscribe for their company's capital increase (Rights Issue).
by assuming this ground, they array themselves in hostility to the moral sense of the civilized world." The way to combat the "curse," he proclaimed, was a homestead act for surveyed government land and preemption rights for unsurveyed land.
Those who had already secured preemption rights then sought to preserve their claims legally.
Alternatively, the company in question may circumvent the preemption rights of the existing shareholders by issuing CBs to the strategic investor, offering him the right, or the option, to convert such CBs into equity in the issuing company.
The stake buy in Kashagan field is subject to approval of governments of India and Kazakhstan and also the other partner in the Caspian Sea field waiving their preemption rights. Italy's Eni, Royal Dutch Shell, France's Total, ExxonMobil and Kaz- MunayGas have 16.81- per cent stake each, while Inpex of Japan has the remaining 7.56 per cent.
An Eni spokesman explained that Eni revoked the agreement signed on 18 December to buy Heritage's 50% stake in Ugandan Blocks1 ad 3A, on which UK oil and gas company Tullow (LON:TLW) has exercised preemption rights.
Eni terminated on Friday the agreement signed on 18 December to buy Heritage's 50% stake in Ugandan Blocks 1 ad 3A, on which UK oil and gas company Tullow (LON:TLW) had exercised preemption rights.
It is subject to the final execution of the sale and purchase agreements, to the relevant regulatory approvals and to partners' preemption rights only on the Iara transaction.