KUALA LUMPUR: The Securities Commission (SC) and Bursa Malaysia have announced a temporary relief measure to listed companies to obtain mandated shareholder approval at a general meeting to undertake rights issue exercises.
The flexibility to allow expedited right issue exercises by public listed companies (PLCs) and listed real estate investment trusts (Reits) will be introduced via an enhanced rights issue framework, they said in a joint statement today.
The measure allows eligible PLCs and Reits to issue new rights shares or units to their existing securities holders on a pro rata basis, up to 50 per cent of the total number of issued shares or issued units.
The SC and Bursa said the rights issue exercises implemented with mandate obtained under the temporary relief measure were subjected to certain conditions.
For example, such rights issue must be a plain vanilla issuance where it can only be utilised for ordinary shares or units and not any other types of securities such as warrant or convertible shares.
Eligible listed issuers will be granted greater flexibilities to manage market uncertainties while making capital calls, and fast track secondary fundraising, subject to certain safeguards.
For instance, the eligible listed issuers must have controlling securities holders who will provide undertaking to subscribe for their full entitlements, with not more than a 30 per cent discount to the theoretical ex-rights price on these newly issued shares or units.
Alongside the broader efforts by the government to chart the recovery path of the nation, the SC and Bursa said theyr were continuously exploring ways to make fundraising through the capital market more efficient.
"As a result of the pandemic and the movement control order (MCO), many listed issuers are facing operational challenges, including raising working capital and repaying bank borrowings.
"An expedited process for rights issues will enable eligible listed issuers to be more agile as they can raise funds from their existing securities holders in a shorter timeframe to meet their capital and financial needs."
They added that the new general mandate for rights issue was in addition to the enhanced 20 per cent general mandate for the issue of new securities, commonly utilised for private placements.
Both relief measures are valid until December 31 2021.