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Singapore Exchange Regulation (“SGX RegCo”) in consultation with the Monetary Authority of Singapore (“MAS”) has on 16 March 2021 extended the availability of the Enhanced Share Issue Limit for Mainboard issuers.
We had previously announced on 8 April 2020 available here that the Enhanced Share Issue Limit will be in force until 31 December 2021. This updated announcement extends the expiry date for the Enhanced Share Issue Limit. Issuers will 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 or on the date by which the next annual general meeting is required by law or the SGX-ST Mainboard Listing Manual to be held, whichever is the earliest.
Details of the update may be found below.
SGX RegCo will provisionally enable Mainboard issuers to seek a general mandate for an issue of pro-rata shares and convertible securities of up to 100% of its share capital (excluding treasury shares and subsidiary holdings in each class) versus 50% previously[1] (“Enhanced Share Issue Limit”).
The Enhanced Share Issue Limit was effective on 8 April 2020. Issuers intending to raise funds using the Enhanced Share Issue Limit must seek shareholders’ approval by way of an ordinary resolution either through obtaining or renewing a general mandate for the Enhanced Share Issue Limit at their annual general meeting (“AGM”) or via specific shareholder approval by convening an extraordinary general meeting (“EGM”). Issuers will have up to 31 December 2021 to do so.
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[2] to be held, whichever is the earliest (the “Expiry Date”).
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:
1. the Board of Directors’ confirmation to SGX RegCo that the Enhanced Share Issue Limit is in the interest of the issuer and its shareholders;
2. compliance with any applicable legal requirements governing the issuer and the constitution/trust deed of the issuer (or the equivalent in the issuer’s country of incorporation) arising from the Enhanced Share Issue Limit;
3. issue of not 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.
4. The issuer disclosing in the notice of general meeting at which a general mandate for an Enhanced Share Issue Limit is proposed to be sought or renewed:-
a. why the 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;
b. 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[3] and/or convertible securities shall be issued under this limit; and
c. 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[4], the remaining balance that would be available under the Enhanced Share Issue Limit after deducting the Existing Amount Used.
5. The issuer notifying SGX RegCo of the following, by way of email enhancedsharelimit@sgx.com when the general mandate for the Enhanced Share Issue Limit has been approved or renewed by shareholders:-
a. name of issuer; and
b. date on which such general mandate is approved or renewed by shareholders.
6. The issuer disclosing that it is utilising the Enhanced Share Issue Limit in its announcement of an issue of shares or convertible securities in this regard.
Please note that the notice of general meeting does not have to be cleared with SGX RegCo and no circular is required.
SGX RegCo will work closely with our issuers in effecting these measures and giving expedited clearance to their fund-raising efforts.
Last but not least, SGX RegCo had provisionally suspended the half-yearly reviews in June and December 2020 to place issuers on the Financial Watch-List. SGX RegCo shall determine where appropriate, if the said provisional suspension requires further extension in due course.
[1] Listing Rule 806(2) states that a general mandate must limit the aggregate number of shares and convertible securities that may be issued. The limit must be not more than 50% of the total number of issued shares excluding treasury shares and subsidiary holdings in each class, of which the aggregate number of shares and convertible securities issued other than on a pro rata basis to existing shareholders must be not more than 20% of the total number of issued shares excluding treasury shares and subsidiary holdings in each class.
[2] Listing Rule 707(1) states that an issuer must hold its annual general meeting within four months from the end of its financial year.
[3] For the avoidance of doubt, shares arising from the convertible securities may be issued and listed after the expiry date of the Enhanced Share Issue Limit.
[4] The date before the EGM and passing of the Enhanced Share Issue Limit resolution.
