Part IV Issue of Shares, Company Warrants and Convertible Securities for Cash (Other than Rights Issue)
An issuer may issue shares, company warrants or other convertible securities for cash other than by way of a rights issue.
810(1) An issuer which intends to issue shares, company warrants or other convertible securities for cash must announce the issue promptly. The announcement must include the following:(a) the terms of the issue and the purpose of the issue including:(i) the identity of the placement agent appointed or to be appointed for the issue, where applicable;(ii) the amount of proceeds proposed to be raised from the issue; and(iii) the intended use of such proceeds on a percentage allocation basis (which could be expressed as a range if the exact allocation has not been determined).(b) where the issue is proposed to be used mainly for general working capital purposes, the issuer must provide reasons for such use taking into account its working capital position;(c) whether the issuer's directors are of the opinion that, after taking into consideration:(i) the present bank facilities, the working capital available to the group is sufficient to meet its present requirements and if so, the directors must provide reasons for the issue; and(ii) the present bank facilities and net proceeds of the issue, the working capital available to the group is sufficient to meet its present requirements; and(d) whether it has obtained a listing and quotation notice from the Exchange or will be seeking the listing and quotation of the new shares arising from the issue.(2) Where no placement agent is appointed for the issue or where a placement agent is appointed but is subject to any restrictions and directions imposed by the issuer regarding the identities of and/or the allocation to the placees, the issuer must also include in its announcement:(a) the identities of the placees and the number of shares placed to each of them;(b) details on how the placees were identified and the rationale for placing to them; and(c) the restrictions and/or directions imposed on the placement agent by the issuer regarding the identities of and/or the allocation to the placees, where applicable.
811(1) An issue of shares must not be priced at more than 10% discount to the weighted average price for trades done on the Exchange for the full market day on which the placement or subscription agreement is signed. If trading in the issuer's shares is not available for a full market day, the weighted average price must be based on the trades done on the preceding market day up to the time the placement agreement is signed.(2) An issue of company warrants or other convertible securities is subject to the following requirements:(a) If the conversion price is fixed, the price must not be more than 10% discount to the prevailing market price of the underlying shares prior to the signing of the placement or subscription agreement.(b) If the conversion price is based on a formula, any discount in the price-fixing formula must not be more than 10% of the prevailing market price of the underlying shares before conversion.(3) Rule 811(1) and (2) is not applicable if specific shareholder approval is obtained for the issue of shares, company warrants or other convertible securities.(4) Where specific shareholders' approval is sought, the circular must include the following:(a) information required under Rule 810; and(b) the basis upon which the discount was determined.
812(1) An issue must not be placed to any of the following persons:(a) the issuer's directors and substantial shareholders;(b) immediate family members of the directors and substantial shareholders;(c) substantial shareholders, related companies (as defined in Section 6 of the Companies Act), associated companies and sister companies of the issuer's substantial shareholders;(d) corporations in whose shares the issuer's directors and substantial shareholders have an aggregate interest of at least 10%; or(e) any person who, in the opinion of the Exchange, falls within category (a) to (d).(2) Rule 812(1) will not apply if specific shareholder approval for such a placement has been obtained. The person, and its associates, must abstain from voting on the resolution approving the placement.(3) Rule 812(1)(a) will not apply provided that:(a) The substantial shareholder:(i) does not have representation (whether directly or indirectly through a nominee) on the board of the issuer;(ii) does not have control or influence over the issuer in connection with the day-to-day affairs of the issuer and the terms of the placement;(b) The placement is effected through an independent process such as book-building;(c) The placement is made to more than one placee; and(d) The proportion of issued shares of the issuer held by the substantial shareholder immediately after the placement is not more than the proportion of issued shares of the issuer held by it immediately before such a placement.An issuer (through its sponsor) should consult and clarify with the Exchange in the event of any uncertainty.(4) The Exchange may agree to a placement to a person in Rule 812(1)(b), (c) or (d) if it is satisfied that the person is independent and is not under the control or influence of any of the issuer's directors or substantial shareholders.
An issuer may borrow shares from its substantial shareholder to facilitate an issue of shares for cash provided that the substantial shareholder does not receive any financial benefit (directly or indirectly) from the arrangement.