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com

JANUARY 2015
SEPTEMBER 2012 BE
R OD Y K R E P OR T USI
R NE S S B ULL ET IN

::: AUTHOR ::: Delisting From SGX

To minority shareholders, delisting of a company from the Singapore Exchange
(SGX) is anathema; since the shares, once no longer publicly traded, are practically
worthless. This article discusses briefly, what delisting entails, and recent
announcements made by SGX in relation to compulsory delisting.

Types of delisting

There are two types of delisting SGX may remove a listed company (Company)
Marian HO from its official list, without the Companys consent (Compulsory Delisting), or a
Partner Company may apply to the SGX to be delisted (Voluntary Delisting).
Corporate
marian.ho@rodyk.com
+65 6885 3610 Compulsory delisting

Rule 1305 of the mainboard SGX-ST Listing Manual (LM) states that a Company will
have to undergo a Compulsory Delisting if any of the following occurs:-

(a) the Company is unable or unwilling to comply with, or contravenes, a listing

rule;

(b) in the SGXs opinion, it is necessary or expedient in the interest of

maintaining a fair, orderly and transparent market;

(c) in the SGXs opinion, it is appropriate to do so; or

(d) the Company has no listed securities.

Rule 1306 read with Rule 1309 of the LM provides that if the SGX compels a
Company to undergo a Compulsory Delisting:-

(a) a reasonable exit alternative, which should normally be in cash (and which
may include a voluntary liquidation of the Companys assets and distribution
of cash back to shareholders) should be offered to the Companys
shareholders and holders of any other classes of listed securities to be
delisted; and

(b) It should normally appoint an independent financial adviser to advise on the

exit offer.

SGX may also issue specific directives relating to a Companys Compulsory

Delisting.

In September 2014, SGX announced that it is targeting to introduce the minimum

share price requirement for mainboard-listed companies and make adjustments to
the existing watch-list by March 2015.

The public's view will be sought on the implementation of this requirement, as well
as the set-up of independent listing committees, following a joint consultation
conducted with the Monetary Authority of Singapore on measures to enhance the
securities market.
 www.rodyk.com

JANUARY 2015
SEPTEMBER 2012 BE
R OD Y K R E P OR T USI
R NE S S B ULL ET IN

SGX said it will proceed to set a minimum trading price of 20 cents for mainboard-
listed stocks given strong public support for the requirement, in a move aimed at
RODYK & DAVIDSON LLP
curbing excessive speculation and potential manipulation.
SINGAPORE
The minimum trading price will be calculated using the Company's volume-weighted
80 Raffles Place average price over six months, said SGX. The review period for compliance with
#33-00 UOB Plaza 1
the requirement will be carried out on the first market day of March, June,
Singapore 048624
Tel +65 6225 2626
September and December.
Fax +65 6225 1838
Email mail@rodyk.com Companies with a share price below the threshold will be placed on a watch-list. If
the Company fails to exit the watch-list within the "cure period" of 36 months, the
SHANGHAI firm will be delisted. According to SGX, about 220 of the 660-plus companies on
the mainboard have share prices below 20 cents.
Unit 23-11 Ocean Towers
No. 550 Yan An East Road
Shanghai 200001, China Voluntary delisting
Tel +86 (21) 6322 9191
Fax +68 (21) 6322 4550 Rule 1307 of the LM provides that a Company may do a Voluntary Delisting if:-
Email shanghai.mail@rodyk.com

(a) it convenes a general meeting to obtain shareholder approval for the

Voluntary Delisting;

(b) the resolution to delist it has been approved by a majority of at least 75% of
its total issued shares (excluding treasury shares) held by the shareholders
present and voting, on a poll, either in person or by proxy at the meeting (its
directors and controlling shareholders need not abstain from voting on the
resolution); and

(c) the resolution was not voted against by 10% or more of the total issued
shares (excluding treasury shares) held by the shareholders present and
voting, on a poll, either in person or by proxy at the meeting.

If a Company is intending to voluntarily delist from the SGX:-

(a) a reasonable exit alternative, which should normally be in cash, should be

offered to the Companys shareholders and holders of any other classes of
listed securities to be delisted; and

(b) it should normally appoint an independent financial adviser to advise on the

exit offer.

It is also pertinent to note that an exit offer made for the purposes of a voluntarily
delisting falls within the ambit of the Singapores Code on Takeovers and Mergers
(the Code) and therefore needs to comply with the relevant rules of the Code
unless otherwise waived by the Securities Industry Council.

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advice relating to particular circumstances. Rodyk & Davidson LLP does not accept responsibility for any loss or damage arising from any reliance on the
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