Finance Directors Say Options For Raising Capital Are Too Restrictive
A new MORI survey among Britain's leading Finance Directors reveals widespread unhappiness with the current restrictions on listed companies' ability to raise capital. Among Finance Directors of the Top 1,000 companies 71% say Boards' access to capital-raising options should be less restricted. This rises to 81% among the FTSE 100 companies.
Three-quarters of Finance Directors feel the ABI/NAPF guidelines on the issue of shares for cash represent a real restriction on their choice of action. The vast majority would like to see a loosening of the 5% per annum guideline; the favourite choice of FTSE 100 companies would be 25%. There is almost unanimous agreement that the Boards of major companies are competent to take such decisions.
Half, and 61% among the FTSE 100, believe the current restrictions give a competitive advantage to other countries where greater flexibility exists.
The Monopolies & Mergers Commission has been investigating charges for underwriting services in the UK. Taking everything into account, four out of five Finance Directors (80%) would support the MMC's remit being extended to a broader review of restrictions in the ways listed companies can raise capital.
Stewart Lewis, Director of MORI, commented : 'The Finance Directors represent the customers of the equity capital markets and these findings clearly reveal a frustration among Finance Directors of Britain's top companies. They feel their Boards' hands are being tied - to the detriment of Great Britain plc'.
Technical details
MORI interviewed 151 Finance Directors from Britain's Top 1,000 listed companies, by telephone in the period 21 August - 25 September 1998. The sample includes 31 Finance Directors of the FTSE 100 companies.
