A rights issue offers existing shareholders the option to purchase additional shares from the company usually at a discounted price. A company may issue rights to raise money for a few reasons: to save a cash-strapped company, to pay off debts, to finance a new acquisition or to fund business growth and expansion, etc. For example, ARA Asset Management, a fund management company, recently conducted a rights issue worth S$150 million for seed capital for new funds and to finance strategic investments. In October, Croesus Retail Trust used a rights issue to raise S$70 million to acquire a retail property in Japan. The time frame to apply for rights shares is short, usually within 1-2 weeks. Existing shareholders who don’t subscribe to the rights issue face share dilution since rights shares are usually sold at a discount to the current market price. Existing shareholders are mailed a thick few-hundred-page legal ......