Posted in Finance, Accounting and Economics Terms, Total Reads: 1945
Definition: Euro Equity Issue
Firms raise capital by either getting debt or by raising equity. Equity can be raised in the home country or in other international markets. When a firm trades simultaneously in different international market, it is termed as Euro-equity. This is in contrast to cross-listing where a company raises capital from his home market and an international market.
A firm takes the route of Euro-equity when it wants to raise more capital. It may also be the case that a firm is unable to raise sufficient capital from his home market and gets listed in bigger exchanges such as NYSE or the London stock exchange. Euro-equity issue can be used to increase credibility in international market by getting ownership of the locals and can be used to raise capital to acquire some other company in that country. The simultaneous IPO’s by international underwriters syndicate. One of the prime example is Gucci.