The Australian Securities & Investments Commission (ASIC) has taken steps to ensure the health of the Australian market during the COVID-19 pandemic.
One of the steps taken is to make it easier for listed companies to raise capital quickly to give them temporary relief during the crisis.
What this means is that these companies will be given temporary relief for certain ‘low doc’ offers such as rights offers, placements and share purchase plans, will to be made to investors, even if they do not meet all the normal requirements.
The regulator explained that normally, some companies would have been prevented from utilising these offers suspended for a long period while assessing the impact of COVID-19 on their business and preparing for a capital raising.
Companies that have been suspended for more than five days in the previous 12 months will not be able to take advantage of ASIC’s new investment regime.
‘We want to give companies more fundraising flexibility in these circumstances,” said John Price, commissioner of ASIC. “Many will need to seek a trading suspension to understand how COVID-19 will affect them and to put a capital raising in place. However, the usual rules still apply.
“Directors need to ensure the capital raising is in the best interests of the company and companies need to make sure they are keeping the market informed via continuous disclosure announcements, even when they are in suspension.”
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