As part of its initiative to improve fundraising flexibility and assist small to medium sized companies raise capital for investment, the Australian Securities Exchange (ASX) recently finalised new listing rules which came into effect on 1 August 2012.
Under new Listing Rule 7.1A, companies can increase their placement capacity by an additional 10% of share capital in 12 months (on top of the standard 15%) provided:
- they are outside the S&P/ASX300 and have a market capitalisation of A$300 million or less
- the additional 10% is approved by members' special resolution at an annual general meeting and is not discounted by more than 25% of market price
- the disclosure requirements under new Listing Rule 3.10.5A are met including disclosing the reason for the issue, the impact on current shareholders, why the issue is via a placement (rather than a rights issue) and the costs and fees involved.
The ASX has also updated admission requirements (effective from 1 November 2012) by lowering the "spread test" in Listing Rule 1.1 and increasing the net tangible assets test from A$2 million to A$3 million in Listing Rule 1.3.1.
A copy of the amendments (marked-up against the current Listing
Rules) can be found on the ASX website at:
http://www.asx.com.au/documents/resources/capital_raising_admission_requirements.pdf
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
