Companies must restore free float if delisting conditions not met; Boustead Projects no exception

BOUSTEAD Projects will be required to restore its free float should its parent company’s privatisation offer fall through, according to Singapore Exchange (SGX) listing rules and regulations.

A Singapore Exchange Regulation (SGX RegCo) spokesperson on Tuesday (Mar 14) told The Business Times (BT) that in the event delisting conditions are not met and free float is lost, the company’s securities will be suspended.

All companies in such a situation are obliged thereafter to restore free float, for example, by way of a placement.

While SGX RegCo maintained it is unable to comment on specific companies, the regulator said those who do not restore their free float may be required to delist.

They must do so while still complying with the existing rules regarding delisting – including the requirement that the deal’s independent financial adviser (IFA) opines that the exit offer is both fair and reasonable, added the regulator.

Its statement comes in response to BT’s queries regarding Securities Investors Association Singapore’s (Sias) concerns over continued acceptance of Boustead Singapore’s offer for Boustead Projects, which would cause a drop in the free float of the latter company.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Sias founder and chief executive David Gerald on Monday called upon SGX RegCo to require Boustead Projects to restore its free float in the event of its loss, as the company “has not complied with the Listing Rules requirements on exit offer for delistings”.

As the appointed IFA has deemed the offer “not fair” but reasonable, Gerald said shareholders “should not fear that the company will be delisted even if they do not accept the offer”.

This is because Boustead Singapore cannot exercise compulsory acquisition under SGX rules, though Gerald warned Boustead Projects could face a delisting in the event it loses its free float.

As at 3.09pm on Tuesday, shares of Boustead Singapore : F9D 0% were trading S$0.005 or 0.6 per cent lower at S$0.85, while Boustead Projects : AVM 0% was flat at the offer price of S$0.95.