Entire Section

  • No further issues of securities within 6 months of listing (17.29)

    • 17.29

      No further shares or securities convertible into equity securities of a listed issuer (whether or not of a class al listed) may be issued or form the subject of any agreement to such an issue within 6 months from the date on which securities of the listed issuer first commence dealing on GEM (whether or not such issue of shares or securities will be completed within 6 months from the commencement of dealing), except for:

      (1) the issue of shares, the listing of which has been approved by the Exchange, pursuant to a share option scheme under Chapter 23;
      (2) the exercise of conversion rights attaching to warrants issued as part of the initial public offering;
      (3) any capitalisation issue, capital reduction or consolidation or sub-division of shares;
      (4) the issue of shares or securities pursuant to an agreement entered into before the commencement of dealing, the material terms of which have been disclosed in the listing document issued in connection with the initial public offering; and
      (5) any issue of shares or securities convertible into equity securities of a listed issuer (whether or not of a class al listed) which satisfies the following requirements:
      (a) the issue is for the purpose of an acquisition of assets which would complement the listed issuer's business described in the listed issuer's initial listing document, and the acquisition does not constitute a major transaction, very substantial acquisition or reverse takeover pursuant to rules 19.06(3), (5) and (6) respectively;
      (b) the issue does not result in a controlling shareholder of the listed issuer ceasing to be a controlling shareholder after the issue and, in any event, must not result in a change in control of the listed issuer within the meaning of the Takeovers Code;
      (c) the issue and any transaction related to it is made subject to the approval of shareholders with the following persons abstaining from voting: -
      (i) any core connected person and its close associates; and
      (ii) any shareholder who has a material interest in the issue and/or the related transaction, other than an interest arising solely by virtue of a shareholding in the listed issuer; and
      (d) the circular in respect of the issue and the related transaction which is despatched to the shareholders of the listed issuer must comply with the requirements of a circular as specified in Chapter 19 and contain such information as is necessary for the independent shareholders to make an informed judgement on the issue and related transaction.

      Note: The circular must include:
      (i) an opinion from an independent financial adviser acceptable to the Exchange stating whether, in the financial adviser's opinion, the terms of the proposed issue and related transaction are fair and reasonable so far as the shareholders of the listed issuer (excluding any of the shareholders described in rule 17.29(5)(c)) are concerned;
      (ii) a statement as to whether or not the listed issuer and its directors had any plan or intention to acquire the assets concerned before or at the time of the issue of the listed issuer's initial listing document;
      (iii) the circumstances under which the opportunity to acquire the assets has arisen;
      (iv) the number of new shares or securities to be issued and the dilution effect on shareholders;
      (v) information on the assets to be acquired including their value;
      (vi) an explanation as to how the issue price for the new shares or securities was fixed;
      (vii) reasons for the acquisition and why it is important for the listed issuer to acquire the assets within six months of its listing;
      (viii) the effect of the acquisition on the listed issuer's business and prospects and on the statement of business objectives set out in the listed issuer's initial listing document;
      (ix) how the acquired assets would complement the listed issuer's business; and
      (x) details of the persons who would receive the new shares or securities and their connection, if any, with any core connected persons of the listed issuer.
      (xi) [Repealed 1 October 2013]
      Notes: In exceptional circumstances, the Exchange may be prepared to waive the requirements of this rule, for example where the listed issuer raised, at the time of its initial public offering, less than the maximum amount stated in its listing document and so as to enable the listed issuer to raise the shortfall of such maximum amount.