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What is a Letter of Offer in a Rights Issue?

A Letter of Offer (LOF) is a formal document issued by a company to its existing shareholders, giving them the right — but not the obligation — to purchase additional shares at a specified price.

It contains comprehensive disclosures about the issue, including terms, entitlement ratio, issue price, timelines, business details, and risk factors, enabling shareholders to make an informed investment decision.

What is a Letter of Offer in a Rights Issue?