Good morning everyone.
Restructuring can be a fraught topic because once a company enters restructuring, it usually means there is not enough money to go around, and for the company to continue, a compromise must be reached between creditors and shareholders.
That is what Singapore’s Insolvency, Restructuring and Dissolution Act 2018, or IRDA seeks to do, to strike a balance between shareholders and creditors to give the company the best chance of success at restructuring.
As I have acknowledged previously and publicly, our listing rules were not drafted with IRDA in mind. It is therefore important that we make the necessary changes to our rules to complement IRDA and support the restructuring of listed companies under IRDA, as well as Singapore’s efforts to be a restructuring hub.
So, what are we consulting on today?
First, restructuring is not easy and can take some time. Is there scope to recalibrate the continuous disclosure framework to give the company more breathing space when it is under a Singapore court supervised restructuring process?
Second, even though restructuring usually takes time, there nonetheless may be the rare opportunity that presents itself which needs to be acted on quickly, for example, to sell assets at a reasonable price instead of a distressed price.
Are we able to give Singapore court appointed officers more discretion to deal with the assets of the company to take advantage of these narrow windows?
Third, sometimes a white knight comes along who is willing to inject fresh funds in exchange for tradable securities in the company. However, shares of companies undergoing restructuring are usually suspended from trading and the company is unable to issue new shares. Is there a way we can solve this chicken and egg problem?
I should emphasize that this is just a start. As we get more conversant with the Act and more familiar with the issues, I am confident we will find more ways to complement Singapore’s restructuring regime even further.
