ASX extends emergency capital raising rules

The ASX has extended its temporary emergency capital raising relief for Australian companies in the face of new outbreaks.

By the end of June, almost 60 listed entities had taken advantage of ASX’s temporary emergency measures to raise capital. Picture: Damian Shaw

The ASX has extended its temporary emergency capital raising relief for Australian companies in response to the worsening coronavirus pandemic in major overseas markets and Victoria.

Introduced by the regulator on March 31 to help listed companies affected by the COVID-19 pandemic to raise urgently-needed capital, the measures have been extended by four months.

These measures which were due expire on 31 July 2020, include permission to request two consecutive trading halts totalling up to four trading days to consider, plan for and execute a capital raising, and a temporary uplift in the 15 per cent placement capacity in rule 7.1 to 25 per cent, subject to there being a follow-on accelerated pro rata entitlement offer or share purchase plan at the same or a lower price than the placement price.

“The decision was made in light of the high and increasing levels of COVID-19 infections in major overseas markets, recent events in Victoria, and the present uncertainty about the nature and level of government economic stimulus in Australia after September 2020,” the ASX said.

“The new date takes account of ASIC’s extension of the deadline for listed companies to lodge their audited accounts for the year ended 30 June 2020 until 31 October 2020.

It gives companies a further month to complete a capital raising, if they decide they need one, after publishing their audited accounts by the revised deadline.”

ASX said the decision follows talks with ASIC and a number of industry stakeholders about the extension of its temporary emergency capital raising measures and received broad support.

As at June 30, almost 60 listed entities had taken advantage of ASX’s temporary emergency measures to raise capital.

More than a dozen others had been denied access to the relief as ASX considered their proposed capital raisings did not conform to the spirit and intent of the class waivers.