Methods of offering of securities
3.14
Mr X and Mr Y are the promoters of ABC Bhd, a corporation which is admitted to the ACE Market on 1 September 2009. As at 1 September 2009 –
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Mr. X and Mr. Y hold in aggregate 30 million ordinary shares of RM1.00 each and 10 million convertible securities which are convertible into 10 million ordinary shares of RM1.00 each, in ABC Bhd;
ABC Bhd has an issued and paid up ordinary share capital of RM45 million consisting of 45 million ordinary shares of RM1.00 each; and
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ABC Bhd has also issued a total of 15 million convertible securities which are convertible into 15 million ordinary shares of RM1.00 each in ABC Bhd.
(a)
For purposes of Rule 3.19 of the ACE LR, what is the amount of shares held by Mr. X and Mr. Y which are to be placed under moratorium?
The shares of Mr. X and Mr. Y which are to be placed under moratorium are as follows:
(i)
From 1 September 2009 until 30 March 2010 (6 months), the entire shareholdings of Mr. X and Mr. Y amounting to 30 million ordinary shares of RM1.00 each in ABC Bhd, must be placed under moratorium;
(ii)
Pursuant to Rule 3.19(1)(e) of the ACE LR, where the promoters also own securities which are convertible or exercisable into ordinary shares of the applicant, the promoters’ shareholdings to be placed under moratorium should amount to 45% of 60 million enlarged share capital of ABC Bhd assuming full conversion or exercise of such securities owned by the promoters.
As such, from 1 April 2010 until 30 October 2010 (the following 6 months), the aggregate shareholdings of Mr. X and Mr. Y amounting to 27 million ordinary shares of RM1.00 each in ABC Bhd, must be placed under moratorium;
(iii)
After 30 October 2010, Mr. X and Mr. Y may sell up to a maximum of 1/3rd per annum (on straight line basis) of the 27 million ordinary shares held under moratorium provided that ABC Bhd has generated 1 full financial year of operating revenue based on its latest audited financial statements.
If, after 30 October 2010, ABC Bhd is unable to generate 1 full financial year of operating revenue based on its latest audited financial statements, can Mr. X and Mr. Y sell their 27 million shares held under moratorium?
No. The moratorium over their 27 million ordinary shares in ABC Bhd must remain. Mr. X and Mr. Y may only sell 1/3rd of their 27 million ordinary shares in ABC Bhd per annum (on straight line basis) after ABC Bhd has generated 1 full financial year of operating revenue based on its latest audited financial statements.