Capital raisings that took place during the GFC contain many lessons in the current environment.
• GFC capital raisings revealed a preference for placements rather than entitlement offers
• Some placements were made on expanded (post raising) capital bases where undertaken alongside entitlement offers and led to dilution of up to 30%
• Issue price discounts were largest when raising capital to pay down debt
• Fees paid to underwriters didn’t always appear to reflect genuine underwriting risk

• Beware sub-underwriting by strategic shareholders that has control implications

Preferred structure for capital raisings is accelerated renounceable entitlement offers, timetable was significantly shortened by ASX in 2014 and should be the starting point for non-distressed raisings.

The report can be downloaded by clicking on the following link: LESSONS-FROM-GFC-CAPITAL-RAISINGS-–-IMPLICATIONS-IN-THE-CURRENT-ENVIRONMENT.pdf

Further reading on the GFC capital raisings is available here and post GFC capital raisings is available here.