Part VIII Very Substantial Acquisitions or Reverse Takeovers
1015(1)(a) Where an acquisition of assets (whether or not the acquisition is deemed in the issuer's ordinary course of business) is one where any of the relative figures as computed on the bases set out in Rule 1006 is 100% or more, or is one which will result in a change in control of the issuer, the transaction is classified as a very substantial acquisition or reverse takeover respectively. An issuer undertaking such a transaction must appoint a full sponsor. The issuer must, after terms have been agreed, immediately announce the following:(ii) the latest two years of historical financial information (of the assets to be acquired) and one year of proforma financial information (of the enlarged group).(b) The acquisition must be made conditional upon the approval of shareholders and, if applicable, the issue of a listing and quotation notice by the Exchange.(2) For very substantial acquisition, the enlarged group must comply with the requirements in Rules 406(3) and (7), Part IX of Chapter 4 and if applicable, Part XII of Chapter 4. The issuer must appoint a competent and independent valuer to value the assets. For the avoidance of doubt, the valuation report for a mineral, oil and gas company must comply with Rules 441 and 442.(3) For reverse takeover, the incoming business and the enlarged group must comply with the following:(a) the requirements in Rule 406, Part IX of Chapter 4 and if applicable, Rule 416 or Part XII of Chapter 4. The issuer must appoint a competent and independent valuer to value the incoming business. For the avoidance of doubt, the valuation report for a mineral, oil and gas company must comply with Rules 441 and 442. With regard to Rule 406(1), the proportion of share capital in public hands must be at least 15% based on the total number of issued shares excluding treasury shares of the enlarged group. Where reference is made to "offer document", it shall mean a shareholders' circular as required pursuant to Rule 1015(2); and(b) the requirements specified in Rules 420, 421 and 422 or 443 are applicable to:(i) persons who are existing controlling shareholders or who will become controlling shareholders of the issuer as a result of the asset acquisition; and(ii) associates of any person in (i).Rule 1015(3)(b) is also applicable to very substantial acquisition.
The applicable period of moratorium in Rule 422 will commence upon resumption of trading of the securities.(c) where the consideration for the acquisition of assets by the issuer is to be satisfied by the issue of shares, the price per share of the issuer after adjusting for any share consolidation must not be lower than S$0.20.(4) In relation to the assets to be acquired, the shareholders' circular must contain the following:(a) information required by Rules 407, 416, Part XII of Chapter 4, 1010, 1011, 1012 and 1013, where applicable. Where reference is made in Rule 407 to "offer document", it shall mean a shareholders' circular as required pursuant to Rule 1015(2);(b) a statement by the sponsor and each financial adviser in the form set out in Practice Note 12A.(5) Unless the Exchange prescribes otherwise, the issuer must comply with the requirements set out in Appendix 4F which sets out the following:(a) the main steps in the very substantial acquisition or reverse takeover process; and(b) documents to be submitted by the sponsor to the Exchange. The sponsor must give the Exchange any additional information or documents which the Exchange requires, either in the particular case or generally.(6) The issuer's sponsor must provide the confirmation required in Appendix 10A that the enlarged group is suitable for listing and complies with the Rules.
Refer to Appendix 10A — Reverse Takeover / Very Substantial Acquisition Listing Confirmation.(7) The Exchange may suspend the securities of the issuer until:(a) the information required in Rule 1010 has been announced (unless the only information missing is insignificant); and(b) the issuer has met the admission requirements set out in Rule 1015(3)(a).(8) Rule 1015 does not apply in the case of an acquisition of profitable asset(s) if the only limit breached is Rule 1006(b).(9) Where a very substantial acquisition or reverse takeover is not completed or is rescinded by any party to the transaction due to any reason, the issuer must immediately announce via SGXNET the following:(a) the reasons for the non-completion or rescission of the transaction;(b) the financial impact of the non-completion or rescission on the issuer; and(c) the possible course(s) of action to protect the interests of the shareholders of the issuer. Notwithstanding this, the issuer must provide timely updates on the specific course of action including its progress and outcome.
Amended on 31 January 200831 January 2008, 1 February 20111 February 2011, 29 September 201129 September 2011, 29 September 201129 September 2011, 10 August 201210 August 2012 and 7 February 20207 February 2020.
The Exchange normally applies the same criteria for IPO to reverse takeovers and may modify any requirement in this Chapter or impose additional requirements if it considers it appropriate, taking into account the rationale for the acquisition, the nature of the issuer's business and its track record.
1017 Cash Companies(1) If the assets of an issuer consist wholly or substantially of cash or short-dated securities, the issuer must consult its sponsor and notify the Exchange. The issuer's securities will normally be suspended. The suspension will remain in force until the issuer has a business which is able to satisfy the Exchange's requirements for a new listing, and all relevant information has been announced. Upon completion of the disposal of its operations and/or assets, the issuer must do the following:(a) Place 90% of its cash and short-dated securities (including existing cash balance and the consideration arising from the disposal(s) undertaken by the issuer) in an account opened with and operated by an escrow agent which is part of any financial institution licensed and approved by the Authority. The amount that is placed in the escrow account cannot be drawn down until the completion of the acquisition of a business which is able to satisfy the Exchange's requirements for a new listing, except for payment of expenses incurred in a reverse takeover approved by shareholders and pro-rata distributions to shareholders; and(b) Provide monthly valuation of its assets and utilisation of cash, and quarterly updates of milestones in obtaining a new business, to the market via SGXNET.Taking the above compliance into account, the Exchange may allow continued trading in a cash company's securities on a case-by-case basis, subject to:(c) Contractual undertakings from the issuer's directors, controlling shareholders, chief executive officer and their associates, to observe a moratorium on the transfer or disposal of all their interests, direct and indirect, in the securities of the issuer; and(d) The period of the moratorium must commence from the date the shareholders approve the disposal of business, up to and including the completion date of the acquisition of a business which is able to satisfy the Exchange's requirements for a new listing.(2) The Exchange will proceed to remove an issuer from the Official List if it is unable to meet the requirements for a new listing within 12 months from the time it becomes a cash company. The issuer may (through its sponsor) apply to the Exchange for a maximum 6-month extension to the 12-month period if it has already signed a definitive agreement for the acquisition of a new business, of which the acquisition must be completed in the 6-month extension period. The extension is subject to the issuer providing information to investors on its progress in meeting key milestones in the transaction. In the event the issuer is unable to meet its milestones, or complete the relevant acquisition despite the extension granted, no further extension will be granted and the issuer will be removed from the Official List and a cash exit offer in accordance with Rule 1308 should be made to its shareholders within 6 months.