Small to medium sized listed companies will now find it easier to raise capital with the ability to issue a further 10% of capital within 12 months by placement. The liberalisation of admission requirements (by increasing the NTA test to $3 million and offering 3 alternative spread tests (of which an applicant need only satisfy one)) should also help get more floats off the ground.

ASX has finalised Listing Rule 7.1A which will allow listed entities outside the S&P/ASX 300 with a market capitalisation of $300 million or less to issue a further 10% of share capital within 12 months through placements.  Listed entities wishing to issue the additional 10% must ensure that:

  • shareholder approval by special resolution at an annual general meeting has been obtained;
  • the extra 10% is issued at a maximum discount to market of 25%; and
  • the additional disclosure requirements are complied with.

ASX has also announced the following amendments to the requirements for new admissions to the official list:

  • amendments to Listing Rule 1.3.1 to increase the net tangible assets test from $2 million to $3 million; and
  • amendments to Listing Rule 1.1 to provide 3 alternate “spread tests” under which an applicant entity may apply for admission (and of which the applicant need only satisfy one).

The capital raising amendments commenced on 1 August 2012, while the amendments to the admission criteria will come into effect on 1 November 2012.

See further analysis in G+T’s M+A Perspectives – July 2012.

See ASX’s Listed Entities Update 07/12, dated 25 July 2012.