Ann: TAFTA Update, page-55

PERFECT UPDATE!
COMPANY STARTED AGAIN 2023
RAMP-UP 2024
PRODUCTION 2025

Three years passed and we can TAHI IPO exactly with the Settelment ! RISK OFF while TAFTA award is hanging over the heads...

Akara Resources can IPO (Initial Public Offering) on the Stock Exchange of Thailand (SET), but it must meet certain regulatory and financial requirements set by the exchange and the Thai Securities and Exchange Commission (SEC). If the company plans to issue preference shares as part of its capital structure, there are specific guidelines to follow as well. Here’s a detailed look at the process:

1. IPO Requirements on the SET

To list Akara Resources on the SET, the company must satisfy several criteria, depending on the board it wishes to be listed on:

SET (Main Board):

• Financial Requirements:
  • Paid-up capital: Must be at least THB 300 million after the IPO.
  • Profitability: The company must have generated net profits of at least THB 50 million over the past 3 years, with profits in the most recent year being at least THB 30 million. Alternatively, the company can qualify through market capitalization by having a market value of at least THB 7.5 billion.
• Corporate Governance:
  • The company must meet high standards of corporate governance, including transparency, accounting practices, and disclosures.
• Free Float Requirement:
  • At least 25% of the company’s shares must be held by public shareholders (or 20% if the company has a market capitalization of over THB 10 billion).
• Track Record:
  • The company must have at least 3 years of operating history under largely the same management or ownership structure.

mai (Market for Alternative Investment):

If Akara Resources is smaller or in its early stages, it could list on the SET’s secondary market, the mai:

• Paid-up capital: A minimum of THB 50 million after the IPO.
• Profitability: There is no strict profit requirement, but the company must demonstrate a clear growth potential.
• Free Float: At least 25% of shares must be distributed to the public.

2. Preference Shares in an IPO

If Akara Resources has preference shares in its structure, they can be included in the IPO, but there are additional considerations:

• Rights of Preference Shares: SET allows the listing of companies with different types of shares, including preference shares. However, it is important that the rights of these shares are clearly defined, especially concerning dividends, voting rights, and convertibility to ordinary shares. These rights must be disclosed in the company's prospectus.

• Dividends: Preference shareholders are entitled to fixed dividends, which should be clearly communicated to investors.

• Convertibility: If the preference shares are convertible into ordinary shares, the terms of conversion should be detailed, including any timelines or triggers (e.g., an IPO itself could trigger a conversion).

• Voting Rights: Preference shareholders typically don’t have voting rights or have limited voting rights. The company must ensure that this structure does not violate any corporate governance principles required by the SET.

3. Regulatory and Legal Requirements

• Filing with the SEC: The company must file a registration statement and prospectus with the Thai SEC. This includes providing detailed financial data, business plans, risk factors, and corporate structure (including any preference shares).

• Corporate Governance: Akara Resources will need to meet stringent governance standards, including having an independent board of directors, audit committees, and proper disclosures to investors. The governance structure should accommodate the existence of preference shareholders.

• Shareholding Disclosure: Companies listed on the SET are required to disclose the structure of their shareholding, including how many preference and ordinary shares exist, their rights, and any restrictions.

4. Steps to an IPO on SET

Here’s an overview of the steps Akara Resources would take to go public on the SET:

1. Engage Advisors: Hire financial and legal advisors to assist with the IPO process. This includes an underwriter, lawyers, auditors, and investor relations firms.

2. Restructure the Company (if necessary): Ensure the company structure, including preference shares, is aligned with SET rules. If preference shares have terms that are unfavorable or unclear, the company may need to modify these terms.

3. Prepare Financial Reports: The company needs to prepare audited financial reports in accordance with Thai Financial Reporting Standards (TFRS) and ensure a track record of profitability (or a clear growth plan for the mai).

4. Submit Documents to the SEC: File the registration statement and prospectus, detailing the company’s financial position, business model, risks, and shareholder structure (including preference shares).

5. Meet Free Float Requirement: Ensure that at least 25% of the shares (either ordinary or a combination of ordinary and preference shares) are owned by public shareholders.

6. Listing Approval: Once approved by the SEC, the company applies for listing on the SET or mai. disallowed will evaluate whether the company meets the listing criteria.

7. IPO Roadshow and Pricing: Conduct a roadshow to present the company to potential investors and determine the IPO pricing.

8. IPO Launch: The shares (including preference shares if applicable) are offered to the public, and the company becomes listed on the SET.

5. Post-IPO Compliance

After going public, Akara Resources must adhere to ongoing compliance and reporting requirements, such as:

• Regularly filing quarterly and annual reports.
• Dividend payments to both ordinary and preference shareholders.
• Corporate governance compliance, including board meetings, shareholder meetings, and continuous disclosures.

Conclusion

Yes, Akara Resources can IPO on the SET, and it is possible to include preference shares in the capital structure. However, the company must ensure that the rights of preference shareholders are clearly defined and that it meets all the financial, legal, and regulatory requirements set by the SET and the SEC. Proper structuring of both ordinary and preference shares, clear financial reporting, and corporate governance practices are essential for a successful IPO.

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