SGX RegCo alters two voluntary delisting rules

Offerors and concert parties must abstain from voting on the delisting resolution.

The Singapore Exchange Regulation (SGX RegCo) will now require exit offers in conjunction with voluntary delistings, enabling shareholder votes to exclude offerors and concert parties, an announcement revealed.

The changes to two aspects of the voluntary delisting rules will kick into effect immediately after consultations with market participants and the public.

With regards to fairness and to ensure investors understand the opinions of independent financial advisors (IFAs), SGX expects the basis for determining the fairness and reasonableness of the offer to be separately detailed. SGX will reportedly work with relevant industry bodies to develop guidance and standards for IFAs and their opinions.

Also read: SGX mulls tougher auditing rules to intensify oversight

Meanwhile, the offeror and parties acting in concert with the offeror must abstain from voting on the voluntary delisting resolution.

“Arising from feedback, the approval threshold is maintained at 75% of total number of shares held by independent shareholders present and voting. The 10% block will be removed,” the market regulator said. “SGX wishes to highlight that offerors should not use other forms of privatisation to avoid complying with the above requirements.”

Therefore, where a general offer is made, SGX will “generally” consider waiving the exit offer and the shareholder vote requirements if the offer is fair and reasonable, and at the close of the offer, the offeror has received acceptances from at least 75% of independent shareholders. The issuer will remain listed if these waiver conditions are not met.

If the public float of the issuer falls below the minimum threshold, SGX RegCo may suspend trading of its securities. In the meantime, the issuer must meet its continuing obligations under the listing rules, including restoring its public float.

Also read: Dragon Group seeks clarification for proposed exit offer

The issuer will be able to delist if a subsequent general offer that meets the waiver conditions is made, or if the issuer enters into a subsequent scheme of arrangement that complies with the listing rules, SGX RegCo noted.

“The feedback we received raised the question of whether delisting is a sufficiently important decision of the issuer to warrant a high approval threshold. We concluded that the approval threshold should be kept at 75%, to give independent shareholders a say in the delisting in all situations,” said Tan Boon Gin, CEO of SGX RegCo.