On the upside, it means any capital issued during an aquisition is going to be above 2 cents minimum as per ASX guidance note 12. Thats more than 3 times above where we sit today.
When issuing shares in conjunction with a back door listing, an entity must ensure that the issue or sale price of any securities being offered is at least 20 cents (the ‘20 cent rule’).
ASX has recognised that, where an entity’s securities have been trading below 20 cents, re-complying with this rule can ‘impose structural, timing and other impediments’ due to the requirement to undertake a consolidation or other restructure prior to securities being issued.
The ASX will now consider not applying the 20 cent rule where:
- the issue or sale price is not less than two cents per security;
- the issue or sale price is approved by shareholders as part of the approvals required for a significant change in activities; and
- ASX is otherwise satisfied that the listed entity’s proposed capital structure is appropriate for an ASX-listed entity.
http://www.asx.com.au/documents/rules/gn12-summary.pdf
