A pre-emptive right (Swedish: företrädesrätt) means existing shareholders may subscribe for new shares in proportion to their holding. It is the main rule in a new share issue for cash and protects owners against dilution. The general meeting can deviate from it, for example in a directed share issue.
Such an issue is called a rights issue. The share ledger shows who owns shares at the relevant time and thus who may subscribe. The new shares are then entered in the share ledger.
A rights issue is a new share issue in which existing owners have priority to subscribe for new shares.
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A new share issue is when a limited company issues new shares for payment to increase its capital.
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A directed share issue is a new share issue offered to selected investors instead of all owners.
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Dilution means existing owners' stake in the company decreases when new shares are issued.
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