This real estate company declares fundraising through preferential issue - Here's what it means
Preferential Issue: It is a way of raising funds by issuing equity shares or convertible securities by listed or unlisted companies to a select group of investors.
Preferential Issue: Hazoor Multi Projects, an infrastructure and real estate firm, has declared fundraising to the tune of Rs 97.90 crore through the issuance of preferential shares.
According to the Hazoor Multi, the move will help the company accelerate growth further and augment its financial resources. The approval in this regard was given by the board of directors of the company in their meeting held on December 6.
What is a Preferential Issue?
Preferential Issue is a way of raising funds by issuing equity shares or convertible securities by listed or unlisted companies to a select group of investors.
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This method of raising funds is the most convenient and fastest way for a company as it requires less paperwork.
Those holding preferential shares have the right to be paid from company assets before general shareholders in case the company goes into bankruptcy. However, those having preferential shares usually don't have any voting rights. Such investors are rewarded only by dividends.
According to an exchange filing, Hazoor Multi Projects will raise the above-mentioned fund by way of creating, issuing and allotting up to 55 lakh equity shares having a face value of Rs 10 each.
"To accelerate growth further and to augment the financial resources of the Company through raising of funds, aggregating amount of up to Rs. 97,90,00,000/- (Rupees Ninety Seven Crores and Ninety Lakhs Only), by way of creating, issuing and allotting up to 55,00,000 (Fifty Lakhs only) Equity Share having face value of Rs.10/- each, to the persons belonging to ‘Non-Promoter, Public Category’, as detailed in Annexure-l, on preferential basis, at an issue price higher than the floor price determined in accordance with the provision of Chapter V of Securities and Exchange Board of India," the company said in the regulatory filing.
12:59 PM IST