.jpg)
"The ministry regulations covering share repurchasing stipulates that listed companies must show that they have accumulated profits and have the ability to repay their debts due during the next six months, starting from the day they put forward their purchase orders. Presently, there are about 150 listed companies that have accumulated profits and could potentially repurchase their shares. The Electricity Generating Plc (EGCOMP) and the General Environmental Conservation Plc (GENCO) are two listed companies that are now commencing share repurchase projects.'
'The additional guidelines that SET has added to the ministry regulations are, for example, that the number of shares to be repurchased must not cause the free-float proportion of that issuing company to fall below 15% for those listed on the SET, and not below 10% for those listed on the MAI. Companies are also prohibited from buying or selling their shares during the period immediately when the information is announced as this may have an impact on their share prices and the rights and interests of the shareholders e.g. the period before the submission of their financial statements, etc. Moreover companies must not knowingly buy or sell shares from connected persons. These changes are aimed at protecting the interests of their shareholders and to prevent the possible loss of their listed status. Furthermore, this should encourage fair trading," Ms Patareeya said.
Listed companies must disclose all information related to the share repurchase both with specific details and within a specific timeframe, so as to provide complete and timely information to their shareholders. Companies must disclose resolutions of their Board of Directors immediately on the same day the board meeting passes that resolution, or at the least, on the following working day, not less than one hour before the start of trading.
In the case where the shares are bought or sold through the Stock Exchange, companies must report on the results of the buy-back or the selling back of shares on the day of the transaction, or no later than at least one hour before stock trading starts on the following working day. Disclosure must be made on the number of shares bought or sold, and the total value of shares that were bought or sold.
In the case where the shares are bought from general investors, companies must report on the results of the buy-back or the selling back of shares within five working days starting from the day of the transaction. Furthermore, disclosure shall be as same as if the transaction was made through the SET.
"In regards to the repurchase practices as detailed in the ministry regulations, the company may start selling the repurchased shares after six months from the completion date of the share repurchase. When the shares are completely sold or the when the selling date is due, no matter whether the shares are sold out partially or completely, the company must report the results to the SET on the date of the resolution or on the following business day, at least one hour before stock trading starts.
The company must notify the change in its paid-up capital to the Ministry of Commerce (MOC), and notify the results of this amendment to their paid-up capital to the SET within seven days. Only at this point is the repurchase scheme considered complete. Companies wishing to start such schemes again in the future will be able to do so only after one year from the final date of the last project," Ms Patareeya concluded.
Further details of treasury stock rules and the process of share repurchase can be accessed at www.set.or.th
