- Investors face documentation delays and helpless helpline ahead of deadline
- The rights problem is the biggest the UK has seen in around 15 years
National Grid has acknowledged the difficulties faced by investors seeking information about its £7bn 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 finance a £60bn investment in Britain’s energy grid infrastructure.
It means more than half a million retail investors must decide whether to participate or not.
But investors have complained about the short time they have been given to make the decision, and some have received the correct documentation with only a few business days to spare.
National Grid rights issue is the biggest the UK has seen since 2009
Meanwhile, those trying to get clarity on the issue potentially face a brick wall of customer services as Equiniti, National Grid’s registrar, struggles to handle “significantly increased call volumes”.
Under the terms of the scheme, National Grid will undergo a fully subscribed rights issue of 1.09 billion new shares, priced at 645 pence each, equivalent to seven new shares for every 24 existing shares.
If investors do not want to buy the newly issued shares, they can sell their rights to buy them at around 190 pence per share to compensate them for the dilution of their stake, a feature known as nil rights.
However, if investors wish to accept the offer, they have until 11:00 a.m. on June 10 to subscribe. There were earlier deadlines for alternatives, including a May 31 “cashless purchase” date with Equiniti.
Under Financial Conduct Authority rules, a listed company must ensure that an open offer remains open for acceptance for at least ten business days.
National Grid’s rights issue prospectus says provisional 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 from Equiniti until Monday, June 3, leaving them very little time to make a decision.
The prospectus also says that those returning provisional award letters should “allow sufficient time for delivery…allowing four days for first-class mail within the United Kingdom.”
Having attempted to contact Equiniti on this issue, social media is abuzz with National Grid investors expressing their frustrations.
“@AskEquiniti is not responding… and we have been given a short deadline to make a decision,” wrote one X user.
“@AskEquiniti is officially the slowest logger in the Galaxy,” said another.
This is Money has heard from investors who spent more than an hour on an Equiniti helpline, which was interrupted before receiving a response.
Another X user said: ‘They are understaffed and their system is not handling the National Grids stock issue very well. I have to call again because I can’t answer the calls.
In a statement, an Equiniti spokesperson said: ‘Equiniti is aware that its general helpline has been experiencing significantly increased call volumes due to high corporate activity and speculation among a number of corporate clients, including National Grid, as a result of its rights issue.
‘Equiniti encourages National Grid shareholders who need support to use the dedicated helpline… 0371-384-2456.’
National Grid said: ‘We are sorry to hear of any frustration affecting shareholders seeking more information about the process.
“We are in close contact with Equiniti, who manages this process on our behalf, to ensure that all queries are addressed urgently.”