Ann: Rights Issue Offer Document, page-5

There are numerous reasons why companies choose this route.

A lot of rights issues often see the underlying share price fall below the offer price. So people let those rights lapse. My understanding is once the renounceable rights have lapsed that's it. The shares attached to those rights cannot be taken up by anyone . Even as a shortfall issue.

So that then means the company does not have the right to distribute any shortfall to major holders or insto's or their mates. Meaning the issue can often fall well short of its cash raising objective.

Also some companies may take the view that they don't want non shareholders participating in an issue. Which they can do with a renounceable issue simply by buying rights on market. Though in my experience exploration companies usually don't give a damn where the money is coming from. Just as long as they get it without the existing management losing control.

Also a non renounceable issue is a less complicated affair for companies that are looking to raise cash quickly.

There are also considerations of control changing hands. If an entity were to actively wade into the market buying up rights that could result in a large parcel being accumulated without any corresponding premium.