ua new issue at 3 cents, page-8

fever2tell

Both a SPP, & rights issue are very similar. Both entail just as much work as each other. Both also have ASIC exemptions to issuing a prospectus if:

SPP - needs to be $5k or below (possibly soon $10k)
Rights issue - Company needs to lodge a cleansing notice with the ASX first.

So what is the main difference between the two then?
SPP - Rewards all holders equally
Rights issue - Rewards larger holders more. As they have more shares, the pro-rata issue means they receive more rights.

So it depends what the intent of the company is ... if it is to reward loyal shareholders, then a rights issue is better. If it is purely & simply to raise cash, then an equal SPP is a efficient option.

By the way, just a point on your maths ... An issue of $5000 to 1000 shareholders will raise $5,000,000, not $500,000.

cheers for now