Scrip issue

A scrip issue, also known as capitalisation issue or bonus issue, is a form of secondary issue where a company's cash reserves are converted into new shares and given to existing shareholders. Or an issue of additional shares to shareholders in proportion to the shares already held. In the United Kingdom, public limited companies, those listed on the London Stock Exchange, have a number of ways to create new shares. A scrip issue is the process of creating new shares which are given free of charge to existing shareholders. To the individual investor, this is known as a scrip dividend. This would normally be done in place of paying a dividend.