Investors in National Grid have been frustrated by delays and confusion over the £7 billion rights issue
- The rights issue is the largest Britain has seen in about fifteen years
National Grid has acknowledged that investors are facing difficulties in seeking information about its £7 billion rights issue, amid complaints about delays in documentation and customer service standards.
The group hopes to use the UK’s largest rights issue since 2009 to help fund a £60 billion investment in the UK’s energy network infrastructure.
It means that more than half a million private investors have to decide whether they want to participate.
But investors have complained about the little time they were given to make the decision, with some receiving the correct documentation within a few working days.
National Grid’s rights challenge is the biggest Britain has seen since 2009
Meanwhile, those trying to get clarity on the issue may face customer service issues as National Grid’s registrar Equiniti struggles to handle ‘significantly higher call volumes’ – although it says this is due to market activity and not the issue of National Grid’s rights.
Under the terms of the programme, National Grid will undertake a fully underwritten rights issue of 1.09 billion new shares, priced at 645p each, equivalent to seven new shares for every 24 existing shares.
If investors don’t want to buy the newly issued shares, they can sell their rights to buy them for about 190 cents per share to compensate them for the dilution of their stake – a feature known as zero-paid rights.
However, if investors want to take up the offer, they have until June 10 at 11 a.m. to register. There were previous deadlines for alternatives, including a May 31 cashless take-up date at Equiniti.
Under Financial Conduct Authority rules, a listed company must ensure that an open offer remains open for acceptance for a minimum of ten business days.
National Grid’s rights issue prospectus states that preliminary allotment letters and corporate-sponsored nominee letters were sent to investors “on or about May 23.”
But This is Money has seen evidence that some investors did not receive letters until Monday, June 3, giving them very little time to make a decision.
The prospectus also says that those returning a provisional allocation letter must ‘allow sufficient time for delivery… and allow four days for first class mail within Great Britain’.
After attempts to contact Equiniti about this issue, social media posts show National Grid investors expressing their frustrations.
“@AskEquiniti is not responding… and we have been given a short timeframe to make a decision,” one X user wrote.
This is Money has heard from investors who spent over an hour on an Equiniti helpline that was cut off before a response was received.
Another I have to call back again because you can’t handle the calls.’
In a statement, an Equiniti spokesperson said: ‘Equiniti is aware that its general helpline is experiencing significantly higher call volumes due to high business activity and speculation among a number of corporate customers, including National Grid as a result of the rights issue.
‘Equiniti encourages National Grid shareholders in need of support to use the dedicated helpline… 0371-384-2456.’
National Grid said: ‘We are sorry to hear of any frustrations affecting shareholders seeking further information about the process.
‘We are in close contact with Equiniti, who are managing this process on our behalf, to ensure all queries are answered urgently.’