ASIC Raising Capital Update

March 31st | 2020

ASIC, the Australian securities regulator, has announced a temporary ‘low doc’ capital raising regime, which is intended to help listed companies raise capital quickly by giving temporary relief to enable certain ‘low doc’ offers (including rights offers, placements and share purchase plans) to be made to investors, even if they do not meet all the normal requirements. This will assist companies that need to raise funds from investors urgently because of the impact of COVID-19. The temporary relief will allow ‘low doc’ placements, rights issues and share purchase plans (SPP) where a listed company:

  • Has been suspended for up to 10 days in the 12 months before the offer, and

  • Was not suspended for more than five days in the period commencing 12 months before the offer and ending March 19, 2020.

ASIC notes, however, that the usual rules will 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.” ASIC will announce an end to this relief with 30 days’ notice.

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