Subject to Securities and Exchange Commission approval, The Stock Exchange of Thailand (SET) will allow listed firms to ask shareholders for a general mandate to raise funds by issuing new shares as a secondary offering. Under a general mandate, shareholders authorize the company’s board in either Annual General Meeting or Extra General Meeting to decide on the details (e.g., capital increasing objectives and price) of each issuance, rather than having to go through a shareholder meeting each time. Using a general mandate will facilitate capital injection, cut costs and help the company to manage its capital structure to go in line with current economic conditions while still protecting shareholders’ interests.
Using a general mandate can shorten the time that firms need to raise funds by four to 10 weeks, Mr. Suthichai Chitvanich, Secretary to the SET Board of Governors, noted in explaining the reasons for the Board’s approval. It can also lower the costs of organizing shareholders’ meetings, particularly if done at an Annual General Meeting of Shareholders.
Firms which do not wish to seek a general mandate can still follow the normal steps and procedures, which require a complete disclosure of all information related to the proposed fundraising to their shareholders for consideration.
All related parties, including the Association of Securities Companies, listed firms, and Thai Investors Association, carefully considered shareholder interests in setting conditions related to the capital injection from general mandate , such as the number of shares, price, offering period, and the types of shares. All of this reflects the SET’s regulatory improvement to meet regional standard, enabling Thai stocks to compete regionally while promoting listed firms’ agility in raising funds and staying competitive.
The SET will propose the capital increasing regulations, with an addition of the general mandate provision, to the Securities and Exchange Commission for approval before putting them in effect.