In July 2008, the Pre-emption Group (comprising representatives of listed companies, investors and intermediaries) issued an updated Statement of Principles to be taken into account when considering the case for disapplying statutory pre-emption rights. The updated Statement of Principles amends the previous guidelines published in May 2006.

The Pre-emption Group has only made limited changes to the Statement of Principles. These changes:

  • clarify that convertible instruments will count towards the guideline levels for non-pre-emptive issues set out in the Statement of Principles and that they should be counted at the point when authority to issue the instruments is sought, not the point at which they are converted into ordinary shares;
  • acknowledge that shareholders will not normally have concerns in relation to any non-pre-emptive issue if there will be no dilution of value as a result of the proposed issue; and
  • recommend that a company should not seek authority to disapply statutory pre-emption rights for more than 15 months or until the next annual general meeting (whichever is the shorter).

The updated Statement of Principles can be found on the Pre-emption Group's website.