Equity offerings and IPO's

What is a subscription right?

For share issues, existing shareholders often get a preferential right to buy new shares in the company. This is called a subscription right.

Only applies for a short period

What is important to remember is that subscription rights only last for a fixed time period. The length of time for a subscription period can vary, but the most common period is two weeks. If the subscription rights are not used in this period, they lose their value. It is therefore very important to keep track to ensure the values are not lost.

Preferential right issue

Everyone registered as a shareholder at a specific time will automatically be assigned subscription rights when there is a preferential rights issue. The share issue documentation will state how many existing shares give one subscription right.

Can I buy or sell subscription rights?

Within the subscription period, the subscription rights will (normally) be listed on the Oslo Stock Exchange. If you have been assigned subscription rights, you can buy or sell these by using the online equity trading solution in DNB Carnegie.

How can I buy subscription rights?

Log in, go to online equity trading and search for the subscription right you are looking for. The subscription rights’ ticker usually have a stock exchange ticker with an additional T at the end. For example, subscription rights in Norwegian Air Shuttle ASA, where the share has the ticker NAS, would have a subscription right ticker NAST.

Search, bring it up, and buy it like you would buy shares.

Sell subscription rights?

If you have been assigned subscription rights in a share issue, these will be visible in your portfolio summary in the online equity trading service.

Log in, go to online equity trading, click on the ‘Portfolio and Orders’ tab. Then find the subscription rights in the summary and click on the ‘S’ (for sell) on the small red button. Then do the same thing as you would when selling shares.

You will find price lists for buying or selling subscription rights here

Can I withdraw from a subscription after it has been submitted?

No, the subscription is a binding agreement of purchase.

To use a subscription right, you can log in to Investor Services in the online bank. Click on events and then on subscriptions.

How do I pay for shares bought in a share issue?

When you order new shares either online, or by using a physical subscription form, you will need to specify the account that is to be charged. This must be a Norwegian bank account. The specified bank account will be charged on a fixed date specified in the prospectus and on the subscription form.

What does oversubscription mean?

If permission for ‘oversubscription’ is granted, you can subscribe for more shares than you have subscription rights to at the outset. However, you will only be guaranteed an allocation of the number of shares covered by the subscription rights you have at the end of the subscription period.

You may also buy more subscription rights on the Oslo Stock Exchange, provided that they can be bought on the stock exchange. These normally give the right to subscribe for one additional share per purchased subscription right, although sometimes more subscription rights are required in order to subscribe for one new share.