Whilst it is not a solution, the situation would be eased considerably if companies made more use of Share Purchase Plans. Using SPPs companies can offer each existing shareholder up to a maximum of $15,000 worth of additional shares every 12 months.
It seems to me that SSPs must surely be the cheapest form of capital raising. All the company has to do is write a letter to each shareholder...its that simple!.No underwriting or other fees. SSPs dont raise a lot for the company but to my mind, the best point about them is that shareholders dont feel ignored.
Mcquarie's satalites, such as MLE (now renamed AAD) have been good in this regard, whenever doing a capital raising it has also invited its shareholders to participate in a SPP.
