Entire Section

  • Interpretation of the classification rules in circumstances where the listed issuer or a subsidiary acquires or realises equity capital (14.25-14.28)

    • 14.25

      In circumstances where acquisitions or disposals of equity capital are made by a listed issuer, the provisions set out in rules 14.26 to 14.28 shall be applied in determining the classification of the transaction for the purposes of rule 14.06.

    • 14.26

      In an acquisition or disposal of equity capital, the numerators for the purposes of the (a) assets ratio, (b) profits ratio and (c) revenue ratio are to be calculated by reference to the value of the total assets, the profits attributable to such capital and the revenue attributable to such capital respectively.

    • 14.27

      For the purpose of rule 14.26:

      (1) the value of an entity's total assets is the higher of:
      (a) the book value of the entity's total assets attributable to the entity's capital as disclosed in its accounts; and
      (b) the book value referred to in rule 14.27(1)(a) adjusted for the latest published valuation of the entity's assets if such valuation is published after the issue of its accounts; and

      Note: This will normally apply to a valuation of assets such as properties, vessels and aircraft.
      (2) the value of an entity's profits and revenue is the profits and revenue attributable to the entity's capital as disclosed in its accounts.

    • 14.28

      The value of the entity's total assets, profits and revenue, calculated in accordance with rule 14.27, is to be multiplied by the percentage of the equity interest being acquired or disposed of by the listed issuer. However, 100% of the entity's total assets, profits and revenue will be taken as the value of the total assets, profits and revenue, irrespective of the size of the interest being acquired or disposed of, if:

      (1) the acquisition will result in consolidation of the assets of the entity in the accounts of the listed issuer; or
      (2) the disposal will result in the assets of the entity no longer being consolidated in the accounts of the listed issuer.

      Note: For example:—
      •   if a listed issuer (or subsidiary, whether wholly-owned or not) acquires 10% of the equity capital of an entity and has no prior holding in that entity, the relevant numerator will be 10%;
      •   if a listed issuer (or subsidiary, whether wholly-owned or not) acquires a further 10% interest in a subsidiary which is al consolidated in the listed issuer's accounts, the relevant numerator will be 10%; and
      •   if a listed issuer (or subsidiary, whether wholly-owned or not) acquires a 10% interest in an entity which will result in that entity being consolidated in the accounts of the listed issuer, the relevant numerator will be 100%.