TOUAX is a French company and is currently Europe's no. 1 in shipping containers and river barges, and no. 2 in modular building and freight railcars. The group provides operating leases to customers around the world, both on its own account and for third-party investors. On June 24, 2009, TOUAX announced that its capital increased by waiving preferential subscription rights but with priority for existing shareholders, launched on 18 June 2009 for a total of E17, 851,519.76 (gross) through the issue of 936,596 new shares which were subscribed in the entirely. Following partial application of the extension clause, 952,747 shares were placed or 101.72% of the issue; total proceeds were E18, 159,357.82.

This rights issue has enabled the Group to strengthen its financial structure, to position itself with advantage for possible acquisitions of tangible stock, and to grasp opportunities thrown up by the crisis (purchase of shipping containers, modular buildings, river barges and railcars, for hiring out on mainly long-term leases). 370,062 new shares allotted under absolute entitlement were subscribed or 39.51% of the total number of new shares issue. Another 555,685 shares were applied for subject to cutting back in the event of over subscription, and orders for these were all filled. Another 27,000 shares had been applied for by the general public, and following partial application of the extension clause it proved possible to fill orders for all of these.

All the result of the right issue, TOUAX is well placed to respond to the boom in corporate outsourcing of non-core assets, and every day provides over 5,000 customers with quick and flexible leasing solutions. TOUAX is now listed on Euronext in Paris - NYSE Euronext Compartment C (ISIN Code FR0000033003), and features in the SBF 250 Index.

Question 1: Companies that can afford should opt for rights issue since it opens room for more investment. The company is likely to attract more shareholders and in the long run boost its ability to improve its financial status. This can be seen from the case in the situation whereby TOUAX was capable of availing shares and all were bought thus increasing the number of investors.

Question 2: The main advantages of rights issue are that it enables the company to strengthen its financial structure as it can be capable of attracting more investments through increasing its shareholders. In addition, by position itself, it will be capable of improving the company's image in the event that the shares issued are made to the present shareholders instead of the public.