Wealth destroyer, page-141

I believe that is an incorrect statement when the definition of dilution = the % holding you have in the company.

1/ Non Renounceable rights issues that raise capital 100% only within the shareholder base by issuing more shares, do not dilute your % stake in the company - It's future earnings, prospects or the value of it's assets- if you provide the company with additional capital ("by putting your hand it your pocket'"). You are however correct your % stake in the company will be diluted if you don't take up the non renounceable rights issue.
All existing shareholders are diluted (their % stake in the company falls) with a non renounceable rights offer (whether they participate or not) - if the offer also occurs outside. It goes without saying in this circumstance, those that do no participate are diluted even more than those that participate.

2/ Renounceable Rights issues that raise capital 100% within the existing shareholder base do not penalise you at all in a capital raising. This is because even if you don't wish to participate, you are offered the opportunity to "renounce" your rights by selling them on market, thereby compensating your fall in the % stake of the business.

3/ It is my understanding companies are not compelled by ASX Capital raising rules to offer either renounceable or non renounceable rights issues totally 100% "in house" to their exisiting shareholders (thereby excluding outside purchasers of stock)

I'd be happy to be corrected on any of the above statements if they are factually false.


Disclaimer. This is a general statement on all companies within the ASX and does not specifically relate to the company in which this tread is posted in particular or indicate one way or other whether or not I believe another capital raising is likely to occur with this company in the foreseable future. It is merely a reply to what I believe to be a misunderstanding by the poster on the meaning of the term "share dilution" pertaining to capital raisings.