Knowledge Highlights 26 November 2024
SGX RegCo allows Mainboard issuers up to 31 December 2021 to seek or renew enhanced share issue limit amid Covid-19
On 16 March 2021, Singapore Exchange Regulation (“SGX RegCo”) announced that it has, in consultation with the Monetary Authority of Singapore, extended the availability of the provisional measure enabling Mainboard issuers to seek a general mandate for an issue of pro-rata shares and convertible securities of up to 100% of their share capital (excluding treasury shares and subsidiary holdings in each class) (“Enhanced Share Issue Limit”) as compared to the previous limit of 50%.
SGX RegCo previously announced on 8 April 2020 that the Enhanced Share Issue Limit would be in force until 31 December 2021. With SGX RegCo’s latest announcement, the expiry date for the Enhanced Share Issue Limit has been extended. Issuers will now have up to 31 December 2021 to seek or renew a general mandate for the Enhanced Share Issue Limit, which will expire at the conclusion of the next annual general meeting (“AGM”) or on the date by which the next AGM is required by law or the SGX-ST Mainboard Listing Manual to be held, whichever is the earliest (“Expiry Date”).
The Enhanced Share Issue Limit took effect on 8 April 2020. To raise funds using the Enhanced Share Issue Limit, issuers must first obtain shareholders’ approval by way of an ordinary resolution either through obtaining or renewing a general mandate for the Enhanced Share Issue Limit at their AGM or an extraordinary general meeting (“EGM”). Issuers will have up to 31 December 2021 to do so.
Any extension of time which may be obtained for the holding of the next AGM will be disregarded in determining the Expiry Date of the Enhanced Share Issue Limit. If an issuer subsequently changes its financial year end, the Expiry Date of the Enhanced Share Issue Limit will be the date by which the next AGM would have been required by law or the SGX-ST Mainboard Listing Manual to be held, whichever is the earlier, assuming no change to the financial year end. For the avoidance of doubt, the limit on the aggregate number of shares and convertible securities issued other than on a pro rata basis remains at not more than 20%.
The Enhanced Share Issue Limit is subject to the following conditions:
- The issuer’s board of directors must confirm to SGX RegCo that the Enhanced Share Issue Limit is in the interest of the issuer and its shareholders.
- The issuer must comply with any applicable legal requirements governing the issuer and its constitution/trust deed (or the equivalent in the issuer’s country of incorporation) arising from the Enhanced Share Issue Limit.
- The issuer cannot issue more than 100% of the issuer’s total number of issued shares (excluding treasury shares and subsidiary holdings in each class) by the Expiry Date.
- The issuer must disclose in the notice of general meeting at which a general mandate for an Enhanced Share Issue Limit is proposed to be sought or renewed:
1. why the issuer’s board of directors is of the view that the Enhanced Share Issue Limit is in the interest of the issuer and its shareholders and their basis for forming such views;
2. that the Enhanced Share Issue Limit will expire at the conclusion of the next AGM, or on the date by which the next AGM is required by law or the SGX-ST Mainboard Listing Manual to be held, whichever is the earliest.
Any extension of time which may be obtained for the holding of the next AGM will be disregarded in determining the expiry date of the Enhanced Share Issue Limit. If an issuer subsequently changes its financial year end, the expiry date of the Enhanced Share Issue Limit will be the date by which the next AGM would have been required by law or the SGX-ST Mainboard Listing Manual to be held, whichever is the earlier, assuming no change to the financial year end.
By the expiry date of the Enhanced Share Issue Limit, the shares and/or convertible securities issued pursuant to the Enhanced Share Issue Limit must be listed, and no further shares and/or convertible securities shall be issued under this limit; and
3. if the issuer is seeking shareholders’ approval via an EGM and has utilised any part of an existing share issue mandate (“Existing Amount Used”), the issuer is to disclose as at the latest practicable date, the remaining balance that would be available under the Enhanced Share Issue Limit after deducting the Existing Amount Used.
- Once the Enhanced Share Issue Limit has been approved or renewed by its shareholders, the issuer must notify SGX RegCo of the date of such approval or renewal. This notification must be made by email to enhancedsharelimit@sgx.com.
- The issuer must disclose that it is utilising the Enhanced Share Issue Limit in its announcement of an issue of shares or convertible securities.
SGX RegCo highlighted that the notice of general meeting does not have to be cleared with SGX RegCo and no circular is required. SGX RegCo also stated that it will work closely with issuers in effecting these measures and giving expedited clearance to their fund-raising efforts.
Reference materials
The media release is available on the Singapore Exchange website www.sgx.com.
Further information
Allen & Gledhill has a Covid-19 Resource Centre on our website www.allenandgledhill.com that contains knowhow and materials on legal and regulatory aspects of the Covid-19 crisis.
In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@allenandgledhill.com.
