Placement leeway for listed companies

TheStar Fri, Dec 24, 2021 12:00am - 5 months View Original


Chief executive officer Datuk Muhamad Umar Swift (pic) said the stock exchange operator acknowledges the “unprecedented lingering impact of Covid-19” on the listed companies. “It is imperative for listed issuers to be able to raise funds through the secondary market in an expedient, efficient and cost-effective manner during these challenging times,” he said.

PETALING JAYA: The opportunity for listed companies to fundraise by placing out a higher percentage of shares has been extended for 12 months, but this leeway can only be enjoyed by companies that have not raised any funds through the relaxed guidelines since 2020.

Bursa Malaysia announced yesterday that listed companies will have up to Dec 31, 2022 to issue new shares by way of private placement under the increased general mandate of 20%.

The leeway will be subject to the same prescribed conditions such as securing shareholders’ approval via a general meeting and complying with all applicable legal requirements.

The board of directors must also disclose that the 20% general mandate is in the best interest of such listed companies and their shareholders.

“The 20% general mandate previously announced on April 16, 2020 will be extended for another 12 months for listed issuers that have not raised any funds using the 20% mandate in 2020 or 2021,” the stock exchange operator said in a statement.

Prior to April 16, the general mandate threshold for new issue of securities was limited at 10%.

Bursa Malaysia also said yesterday that the general mandate of 50% based on a pro-rata entitlement for new issue of securities by way of rights issue has been extended by another 12 months.

The 50% general measure was initially announced on Nov 10, 2020.

“Additionally, the pro-rata 50% general mandate can now be utilised to issue a combination of ordinary shares or units and convertible equity securities (instead of just ordinary shares or units previously) as part of the rights issue exercise,” it said.

Without the extension, both the 20% general mandate and the pro-rata 50% general mandate would expire on Dec 31, 2021.

Bursa Malaysia said the extension is in line with its commitment to assist listed issuers to address their funding needs and working capital requirements by easing compliance and facilitating secondary fundraising.

Chief executive officer Datuk Muhamad Umar Swift said the stock exchange operator acknowledges the “unprecedented lingering impact of Covid-19” on the listed companies.

“It is imperative for listed issuers to be able to raise funds through the secondary market in an expedient, efficient and cost-effective manner during these challenging times,” he said.

Earlier this week, StarBiz reported that more listed entities are raising funds via private placements in the fourth quarter as companies rush to take advantage of the relaxed general mandate, prior to its expiry on Dec 31.

According to announcements on Bursa Malaysia, about 50 companies have announced plans to raise funds through private placements since October compared to over 40 companies for the July-September period.

These include Bintai Kinden Corp Bhd, Adventa Bhd, KNM Group Bhd, KKB Engineering Bhd, Kobay Technology Bhd, Samaiden Group Bhd, SMTrack Bhd, Khee San Bhd and CN Asia Corp Bhd, as well as Green Packet Bhd, which is proposing to undertake a private placement of up to 40% of its shares.

These companies are looking to raise over RM2bil for working capital requirements, business expansion, diversification into new areas and repayment of borrowings, among other things.

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