Issuance of Warrants
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Rules Summary
When a listed company would like to issue and allocate its warrants, the company has to disclose relevant information and performing relevant actions such as disclosing the board’s resolution, seeking approval from shareholders, allocating the warrants and reporting results, reporting about the conversion of warrants to common shares, and registering these additional common shares.
If the listed company wish to get their warrants traded on SET to enhance liquidity to unitholders, it needs to follow the listing process and notify shareholders about their conversion rights.
Warrant Issuance and Allotment
Subject |
Details |
Required information disclosure once the Board has made a resolution to issue warrants |
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Delivering an invitation to shareholder meeting |
Deliver an invitation letter to shareholders along with related documents 7 days prior to the meeting date. However, for warrant PP case, the company needs to deliver the invitation 14 days in advance, plus additional following information:
1 For multi-purpose use of funds, details, budget, and the funding planned for each purpose must be separately and clearly identified. 2 In case of connected transactions or being subject to the acquisition or disposal of assets, the shareholders’ approval as per related announcements is required and must be stated in the agenda, so that the transaction can be done upon approval.
3 Price Dilution = Pre-offering market price – Post-offering market price
4 Earnings Per Share Dilution = Pre-offering earnings per share – Post-offering earnings per share
5 Control Dilution = Total shares offered
6 The warrant offering price is based on offering and exercise price of Warrant PP. 7 The shareholders should be informed that the figures are only estimates for their primary consideration. The exact number will be based on the share prices on the SET on the date they have become entitled. |
Announcement of the shareholder resolution |
Within the shareholder meeting date, or by 9:00 am of the following day at the latest via SETLink system. |
Report on warrant issuance and allotment |
Within 14 days from the closing and payment date (or the day warrants are issued as free warrants) via SETLink system using the Securities Offering Report Form (F 53-5) |
The listed company must clearly notify about the conditions for rights adjustment in the shareholder meeting invitation, for example, when the company pay out dividend more than 75% of net profits after tax, during an accounting period when the warrants are still valid. |
Comparison of SEC Rules by Type of Warrant Issuance and Allotment
Features | Type of Allotment |
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Existing shareholders/PPO |
General public |
Private placement |
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Feature of Warrants |
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/ | / | / |
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/ | / | / |
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/ | / | / |
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/ | / | - |
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/ | / | With transferring limitation |
Requirements for the listed company |
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- | / | - |
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- | / | * |
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/ | / | / |
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/ | / | / |
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/ | / | / |
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/ | / | / |
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- | - | / |
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/ | / | / |
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/ | / | * |
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RO 1 year PPO 6 months |
/ | * |
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/ | - | / |
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/ | / | / |
* Depending on how the offering price is determined as per the rules on PP warrants issuance and offering.
** The company must specify the case and conditions about the rights adjustments that “The listed company will notify about warrant ratio and price before the previous ratio or conversion will take effect.”