Secondary Offering of Shares
There are two main contexts for "secondary offering of shares" in Singapore:
Investors Selling Shares (Secondary Market): After a company goes public through an initial public offering (IPO), existing shareholders can sell their shares to other investors on the stock exchange. This is a secondary market transaction, and the company itself doesn't raise any capital. The proceeds from the sale go to the selling shareholders.
Company Issuing New Shares (Follow-on Offering): A company can also conduct a follow-on offering, which is a type of secondary offering where the company itself issues new shares for sale to raise capital. This can be done for various reasons, such as funding expansion, research and development, or debt repayment.
Here's a breakdown of the key differences:
Beneficiary: In a secondary market sale, the seller (existing investor) receives the proceeds. In a follow-on offering, the company raising capital gets the money.
Impact on Shares: A secondary market sale doesn't change the total number of outstanding shares. A follow-on offering (if dilutive) increases the total number of shares outstanding, potentially affecting existing shareholders' ownership stake.
For companies seeking a secondary listing on the Singapore Exchange (SGX), it can be done with or without a concurrent follow-on offering.
Comments