The SET President, Mr. Kittiratt Na-Ranong, revealed the SET's Board of Governors on Wednesday, March 26, 2003, decided to adjust the criteria for listed companies in the REHABCO sector. This is to boost investors' confidence in the quality of listed companies on the SET and to prevent losses which investors owning shares of listed companies undergoing restructuring may incur. Currently, there are 53 companies in the REHABCO sector, from the total of 399 listed companies.
"The SET's Board of Governors has implemented more stringent measures in allowing listed companies to come out of the REHABCO sector. To return to its respective sector, a listed company must meet the following criteria. It must have more than zero shareholders equity , post net profit from its main business for three consecutive quarters or for one year, have a stable status, and have a positive cash flow. In addition, the company must show it has a stable financial status and performance, be able to successfully restructure more than 75% of its debts, and be able to payback its debt to creditors as scheduled. The SET will bar the company's strategic shareholders from selling their shares for a period of one year. The shareholders can sell 25% of their stake during the first six months after the first day of normal trading and another 25% during the next six months." Mr. Kittiratt said.
For allowing shares of listed companies in the REHABCO sector to trade again, the SET would implement the same regulations as those of listed companies switching to normal sectors. For companies, where trading has resumed, if their financial statements show worse results, such as more negative shareholders equity or shareholders equity of less than zero, the SET will post an SP (Suspension) sign to stop the trading of the company's securities. This would take effect after the financial report dated December 31, 2003 is released.
The SET President said, "to stimulate companies undergoing debt restructuring and to speed up the process efficiently, the SET's Board of Governors has listed its criteria to delist companies that have remained in the REHABCO sector for more than two years and have showed no progress in their debt restructuring.
Firstly, the SET will monitor and consider problem solving of companies under rehabilitation. The companies will be asked to report to the SET every six months.
Secondly, the SET will propose to the SET Board of Governors to delist a company if:
- the company has no more assets or capital to continue its business or the company's main business cannot sustain it, or;
- the company's debt restructuring plan does not take into consideration the rights of the minority shareholders or lower share value of existing shareholders equity to zero, or;
- the company's executives or creditors do not make it their objective to restructure its debts so business can continue, or;
- the company does not have an appropriate or clear debt-restructuring plan or has a large amount of debt left after restructuring, which obstructs the continuation of business.
However, the companies that have made progress in their debt restructuring must have shareholders equity more than zero or have net profit from their main business within three years after the implementation of this regulation. If not,, the SET will propose that the Board of Governors delist the companies. These new regulations will be put into effect on March 28, 2003 onwards."
Mr. Kittiratt shed light on the SET's Board of Governors' ruling, saying, "the Board of Governors has approved in principle to regroup listed companies into different sectors, from the current 30 sectors (excluding REHABCO sector) to only eight sectors. These changes are to reflect the overall changes in the Thai economy and present a clearer picture of the industries in Thailand. The eight sectors are the Agro & Food Industry, Consumer Products, Financials, Industrials, Property & Construction, Resources, Services, and Technology."
"The SET will carry out the regrouping of listed companies in three steps to acquaint related parties and listed companies with the new grouping as well as to minimize repercussions from the change. These steps are expected to be carried out in a period of about three years from 2004 to 2006," the SET President said.
The first stage of the change will be implemented from January 1, 2004 onwards. In this stage, industries with similar businesses will be grouped into the eight new sectors while the 30 sectors will be remained.
The second stage, which will start on January 1, 2005, will see a name change and re-defining of some current sectors. This would portray a clearer and more suitable overview and will cover new types of industries. In this stage, listed companies may be moved to a more appropriate sector.
The third stage will commence on January 1, 2006. It will see the cancellation of the current sectors to create groupings that are more concise and clearly defined. Sectors in the SET will be reduced, in line with the industrial groupings of the entire country's economy."
Mr. Kittiratt added, "this new grouping of listed companies will enable products in the SET to portray the whole economic picture of the country. Listed companies will be included in the same sector as those with related businesses and the sectors will also cover new types of businesses, which are more varied in this changing world. The SET will hold public hearing sessions to receive input on this issue from member companies and listed companies, as well as related parties in every phase."
Mr. Kittiratt said the SET's Board of Governors has decided to transfer the Back Office Service Bureau, which was previously under the SET, to the Thailand Securities Depository Company Limited (TSD). The TSD is more involved in after-sales transactions relating to the Back Office Service Bureau. Transferring the Bureau will increase the effectiveness of the TSD, by lowering costs and the use of personnel. It will take effect from July 1, 2003 onwards.
In addition, the SET's Board of Governors has looked over the appeal of Mr. Kittipat Yaoprukse. On February 26, 2003 the SET's board ruled to include his name on the list of individuals who should not be in a management position . The SET's Board has considered the resolution of the Appeal Committee that has upheld the ruling and decided to uphold its ruling. It has also asked Roynet Plc to change its management in order to maintain its status as a listed company within 45 days after the SET Board has informed the company.
