The Board resolved today (Nov. 23) to relax the rules for firms under rehabilitation (REHABCO) which haven’t yet achieved net profits for three consecutive quarters or net profits on a whole-year basis, as required. Following today’s decision, such firms would be permitted to remain under rehabilitation rather than be considered for delisting.
The SET will consider relaxing the rule only for companies having positive shareholders’ equity as stated in the firm’s consolidated financial statements as of December 31, 2005. Firms wishing to extend their rehabilitation period must apply to the SET within 7 days after the deadline for financial statement submission. The decision on the extension will be made by March 31, 2006.
For companies which have negative shareholders’ equity and/or are unable to meet debt-restructuring requirements, the delisting rules still apply. Nevertheless, prior to delisting, the SET will allow the trading of these companies’ shares for 30 days. During this period, trading of these firms’ securities under margin accounts or using the net-settlement method will be prohibited.
Prior to today’s decision, listed companies that had been in the REHABCO sector for over two years but weren’t able to meet requirements on shareholders’ equity and net profits by March 31, 2006 would be in danger of delisting.
“This year several factors affected economic conditions and operational results of firms in some sectors, e.g., rising oil prices, and higher interest rates. The REHABCO companies with positive shareholders’ equity might therefore have been unable to effectively recuperate to meet the net profit requirements. Thus, the SET Board has extended their rehabilitation period,” SET EVP, Ms. Patareeya Benjapolchai, said.
The REHABCO sector will remain until further notice. If a time comes when there are less than ten companies remaining in the sector, the sector will be removed and the remaining REHABCO firms will be temporarily reinstated back to their regular sectors. During that period, their securities will be suspended and posted with a “Compliance” (“C”) sign to warn investors that the securities may be subject to delisting.
Currently there are 44 companies in the REHABCO Sector. Four of them are available for trading.
