Proposed Plan to Change Rights Issue Timetable

The regulators is going to change the timetable for the Rights Issue especially on the schedule to get the vote from shareholders (AGM). Previously there has been a lot of problems with the AGM process because the AGM is conducted only after the regulators have approved on the content of the prospectus and therefore if regulator delayed the process, then the AGM timetable will need to change. As such, there are cases where one company has to revise its AGM dates for time and time again as there has been some changes on the content of prospectus.

This new plan will allow the company to announce and to conduct AGM on their intention to do Rights Issue first before any submission of prospectus is done. This will eliminate the change of AGM dates and will create more certainty on the AGM process and more certainty that the Rights Issue will be conducted before any submission to Regulator.

Basically this proposed plan will align the practice that has been done in the US and Spore market.

Stock Price Effect
The market was worried about the information effect on the announcement of Rights issue to the price of the stock and so far the announcement on the price of rights is only done prior to the AGM or just before the execution of the Rights Issue.

Timeline
We are yet to see the certainty on how long the AGM can be conducted prior to the Prospectus submission. In Spore case, a company can have blanket approval from shareholders and execute it within 2 years and the same goes to the US market. However, I would see such blanket approval may not be that long in this market. Most likely it will be 1 year as Regulator may worry that overspeculation in the stock can happen if the blanket approval is given too long. Well, we'll see.

The bottomline is we have been waiting for this regulation to be passed as it will shorten the process of Rights Issue by A LOT!!!!

Have a nice day!