Different paths for watch-list firms that seek Catalist transfer
The Singapore Exchange (SGX) on Monday sketched out the
different paths for mainboard companies that are seeking to transfer to the
Catalist board - including those to be placed on the watch-list because they do
not meet the minimum trading price (MTP) requirement.
Comments
Jamie Lee
05 January 2015
The Singapore Exchange (SGX) on Monday sketched out the different paths for mainboard companies that are seeking to transfer to the Catalist board - including those to be placed on the watch-list because they do not meet the minimum trading price (MTP) requirement.
The steps taken by firms that have trouble lifting its average trading share price above 20 Singapore cents (on a volume-weighted basis over six months) will vary from those singled out in part for sustained fiscal losses.
Companies placed on the watch-list from March 1 will be there either because they made years of losses and have a smaller-than-expected market value, or do not comply with the MTP. They will have up to three years to rectify the issue, or face delisting from the main board. But the watch-list criteria do not apply to Catalist, making the platform an option for watch-list companies that cannot meet the mainboard requirements.
In a regulator's column, SGX said that mainboard firms that are placed on the watch-list only due to non-compliance with the MTP rule can choose to transfer to Catalist by appointing a sponsor and applying to SGX for the transfer. The sponsor should be satisfied with the company's plans to improve its business fundamentals, and that the transfer to Catalist is necessary for the company to address its funding needs and execute its plans.
The requirements change for any loss-making mainboard company at risk of being placed on the watch-list. From March 1, at-risk companies would refer to those that would soon register three straight years of losses, and those that have their average market capitalisation heading below S$40 million over a period of six months.
SGX said that such a company must consult the bourse on plans to transfer to the Catalist board. The company must also engage a sponsor. The sponsor should provide to the company advice on corporate actions relating to fund raising, reverse takeover or acquisitions - demonstrating that the business is viable.
"SGX may impose additional conditions on a case-by-case basis. The company can proceed to apply to SGX for a transfer once SGX issues a no-objection," SGX said. The same guidelines apply for a watch-list firm that is now profitable, but whose market value does not meet mainboard rules.
A mainboard company whose six-month volume-weighted average trading share price is below 20 Singapore cents after March 1 will be placed on a watch-list. Companies that have completed share consolidations before March 1 will have a six-month extension, and will only be assessed for compliance on Sept 1.