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Pressure Points: Extension of temporary relaxations under Pre-emption Group Guidelines (UK)

07 September 2020 | UK
Legal Briefings


The Pre-Emption Group (PEG) has announced that it is extending the temporary additional flexibility under the pre-emption guidelines in light of Covid-19.

In April 2020, it announced that it was recommending that investors, on a case-by-case basis, consider supporting placings by companies of up to 20% of their issued share capital over a 12-month period (rather than 5%, or 10% for a specified acquisition or investment). This temporary relaxation was due to end on 30 September 2020 but has now been extended by a further 2 months to 30 November 2020 in light of the continued uncertainty.

The PEG has reiterated certain issues that a company looking to use the additional flexibility should bear in mind, including that:

  • it should only do so if it is experiencing extreme circumstances, and issuance is required to fund an immediate concern;
  • the particular circumstances of the company should be fully explained, including how the company is supporting its stakeholders;
  • effective consultation with a representative sample of the company’s major shareholders should be undertaken; and
  • consideration should be given to the effect of the issuance on retail shareholders, and how they may be able to take part in some aspect of the issuance.

For further information on the PEG recommendation, see the briefing published by our ECM team in April.

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