The Stock Exchange of Thailand (SET) will permit listed firms to raise capital using the General Mandate rule, effective from March 15, 2011.
Raising funds by seeking a general mandate from shareholders is an additional approach to the existing process which help firms obtain new capital more efficiently and at a lower cost, increasing their competitiveness. It will become effective on March 15, 2011, SET President Charamporn Jotikasthira, noted.
In asking for a general mandate, the company planning to increase its capital can ask shareholders for approval as to the number of shares and the types of the allocation at either an annual general meeting (AGM) or an extraordinary general meeting (EGM), authorizing the company’s board to decide on the details and timing of each issuance. Using a general mandate is permissible for a right offering (RO) or public offering (PO), or a private placement (PP).
To protect investors, the Exchange has sets up rules for using the general mandate approach specifying that capital increase shares must not exceed 30.00% of the company’s paid-up capital, and the shares allocated for public offering and private placement combined must not exceed 20.00% of paid-up capital. Moreover, the price for the newly-issued stocks to raise funds must not be too low (as set forth in the Securities and Exchange Commission criteria). In addition, firms injecting new capital must complete the shares allocation process before holding their next AGM. For more information, please visit www.set.or.th/generalmandate.
Introducing the general mandate option is one of SET’s strategies to promote and facilitate listed firm’s capital increase, add value and provide quality service to listed firms while helping elevate SET’s operations to match regional standards. Before finalizing the general mandate procedures, the Exchange sought the opinions of the Association of Securities Companies, listed firms, and Thai Investors Association.