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CHANGJIANG Fertilizer Holdings on Tuesday said it has been deemed a cash company, and will have its securities suspended until it finds a new business for injection.
But Changjiang intends to seek continued trading in its shares, and will apply for a trading halt in the meantime. Singapore Exchange (SGX) may allow continued trading if, among other things, the company's controlling shareholders, chief executive officer and their associates observe a moratorium on the transfer or disposal of their company stock until Changjiang acquires a new business.
Once it has disposed of its existing operations and assets, Changjiang must place 90 per cent of its cash and short-dated securities - which include existing cash balance and money received from asset sales - in an account opened with and operated by an escrow agent that is licensed and approved by the Monetary Authority of Singapore.
The amount that is placed in the escrow account cannot be drawn down until the completion of the acquisition of a business which is able to satisfy the exchange's requirements for a new listing. The exception would be for payment of expenses incurred in a reverse takeover approved by shareholders and pro-rata distributions to shareholders, Changjiang said.
In addition, it must provide monthly valuation of its assets and use of cash, as well as quarterly updates of milestones in obtaining a new business through regulatory filings.
"Shareholders should note there is no assurance that the SGX will not suspend the trading and listing of the company's shares," Changjiang said.
"Shareholders should note that the SGX will proceed to remove the company from the official List if it is unable to meet the requirements for a new listing within 12 months from the time it becomes a cash company."