- Fund future expansion. They see potential to buy assets that can create a higher return on investment
- Pay off debts. Debt interest rates get too expensive. Their net asset value have gone down such that their debt to asset ratio worsen, this could eventually affect their credit rating which will affect future debt purchase
- Cost of equity is cheaper than cost of debt. ...
Share placements are issue of shares to a particular group of potential investors. Typically, these investors are not existing investors. This is probably because the existing substantial share holders do not want to do a rights issue which would mean putting in their own cash. (Think how China Merchant Pacific, whose owner owns 81% of it doesn’t want to do a rights issue because they will end up paying it mainly by themselves)
The company that issues usually do this to shore up their balance sheets to