Known in finance as a secondary equity public offering. Company is in trouble and board needs a pile of cash to turn around the business. Banks won't lend enough cash at an affordable interest rate and a bond issue just ain't gonna work either.
Board will need to present a clear case to shareholders as to why they should stump up so much cash in comparison to existing market capitalisation. Flybe will get the cash as the deal has been underwritten, but the airline is probably paying between £5m and £10m in underwriting fees
Last edited by davidjohnson6; 20th Feb 2014 at 10:04.