Material Dilution of shares?

sfulton | 13:28 Wed 26th Aug 2009 | Business & Finance

2 Answers

Can anyone tell me what it means if a company has warned that debt talks with its banks are likely to lead to a "material dilution" for existing shareholders?

Thank you.

husband & wife shared liabilities

norwegian krone/sterling exchange rate sept.2008

Answers

1 to 2 of 2

Best Answer

No best answer has yet been selected by sfulton. Once a best answer has been selected, it will be shown here.

For more on marking an answer as the "Best Answer", please visit our FAQ.

buildersmate

The bank is owed a shed-load of money via overdrafts and/or loans. The two parties propose to reduce the debt by swapping it for equity - namely the bank will be given new shares in exchange for the debt. This extra shareholding will reduce (dilute) the ownership proportion for all existing shareholders.

sfulton

Question Author

Thank you. Great explanation. Unfortuntely this is the company I work for but at least I don't own any shares!

1 to 2 of 2

Do you know the answer?