We recently provided an update about the temporary measures introduced by the ASX and ASIC to assist listed entities with capital raising during the COVID-19 pandemic (click here to read our earlier post).
This week, the ASX has provided further clarification regarding, and made changes to, the temporary measures it has introduced. Key points to note are:
- Listed entities must give prior notice to ASX that they intend to rely on the class waiver relief. That notice must explain whether the capital raising is proposed to be made to raise urgently needed capital to address issues arising in relation to COVID-19 health crisis and/or its economic impact or for some other purpose.
- Listed entities may undertake a placement followed by a standard rights issue (rather than an accelerated rights issue).
- When announcing the placement to the market, the listed entity must provide (amongst other things) the following information:
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- the results of the placement; and
- the approach the entity took to identify investors to participate in the placement and how it determined their respective allocations in the placement. ASIC has suggested that issuers should consider the findings of ASIC Report 605 Allocations in equity raising transaction in making allocation decisions.
- The listed entity must supply to ASIC and ASX (not for release to the market) a detailed allocation spreadsheet. ASIC will be reviewing the allocation spreadsheets and monitoring the disclosures made by companies about placements, rights offers and SPPs to ensure they are accurate, sufficiently detailed and provide meaningful disclosure.
ASX has confirmed that it has the power to withdraw the class waivers from an individual listed entity at any time and for any reason by giving the entity written notice to that effect and to withdraw the class waivers prior to their scheduled expiry date of 31 July 2020 for all listed entities by a market notice to that effect.
If you have any questions on how these changes could assist you to raise funds, please don’t hesitate to contact us on +61 (0)3 9663 9877 or at contact@khq.com.au.
This article was written by Kate Landells (Principal Solicitor) and Andrew Walker (Director).
