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 ?
The subscription to 4,846,875 new shares issued in cash is reserved, in priority, to the former shareholders holding the shares making up the current share capital and to the assignees of subscription rights on the stock market, both irreducibly and reducible on the basis of one (01) new action for a (01) old share, from 20/05/2019 to 28/06/2019 included, said MCP.
One existing share entitles to one subscription right and one subscription right entitles to subscription of one new share.
Under the terms of the Rights Offering, all record holders of the Company's common stock as of 5:00 p.m., Eastern Daylight Time, on April 19, 2016, the record date for the Rights Offering, will receive, at no charge, one non-transferable subscription right for each share held as of the record date ("basic subscription privilege").
Holders of series A, B and C common shares will be given one-fourth of a share of the corresponding series of Liberty Broadband common stock for each of their shares held as of the record date for the spin-off, as well as a subscription right to buy one series C Liberty Broadband common share for every five shares of Liberty Broadband common stock they receive in the spin-off.
According to the terms of the rights offering and subject to applicable law, the company will distribute at no charge, to the holders of record as of 1700, New York City time, on August 4, 2010 of its common stock, transferrable subscription rights to purchase additional shares of the company's common stock.
Those shares remaining after existing shareholders have exercised their subscription rights will be allocated to JJW Central & Eastern Europe Beteiligungsverwaltungs GmbH (an Al Jaber company) in an amount corresponding to 20% of the shares in Austrian Airlines, after taking into consideration the subscription rights exercised by the company's existing shareholders.
Each holder of the company's common stock will receive one non-transferable subscription right to purchase 0.986896 shares of its common stock at a price of USD0.30 per whole share for each share of its common stock held as of 17:00 , New York City time, on 27 June 2019 (the rights offering record date).
If exercising subscription rights through a broker, dealer, bank or other nominee, rights holders should promptly contact their nominee and submit subscription documents and payment for the units subscribed for in accordance with the instructions and within the time period provided by such nominee.
According to the company, shareholders in the company have preferential right to subscribe for shares whereupon one existing share in the company entitles to one subscription right and five subscription rights entitle to subscribe for two new shares.
In total, H&D Wireless received subscription notification of 5 112 820 shares of which 1 623 405 was with the support of subscription rights and 3 489 415 shares were with without the support of subscription rights.