英文: CSRC issues provisional rules raising threshold for additional share offers The China Securities Regulatory Commission has published a set of regulations raising the threshold for companies seeking to launch additional share offers and is seeking opinions from the securities industry on the possible implementation of the regulations.
Under the rules, companies can only launch additional share offers if their weighted average return on net assets for the previous three accounting years is no less than 10 pct, and if their weighted average return on net assets in previous accounting year is no less than 10 pct. When calculating its return on net assets, the company must use whichever figures are lower -- the weighted average return on net assets or the weighted average return after exclusion of extraordinary items.
The company may only launch an additional offer if its gearing is above the average level for all listed companies in the same industry.
The company must also show that it has achieved 70 pct completion of previous investment projects funded via previous share issues.
If a company intends to launch an additional offer in which the quantity of offered shares exceeds 20 pct of the company s existing issued shares, the firm must have the approval of more than 50 pct of the holders of its listed shares.
The company must also show that there have been no problems with its management structure over the past year and must show that its accounting policy has been consistent and it does not have large debts.
It must also show that it has not deviated by a large degree from investment plans outlined in previous share offer prospectuses.
If a company company s earnings 0drop by 50 pct or more after an additional offer, the offer s main underwriter will have its underwriting business curtailed or suspended.
If a company already has approval to launch an additional offer, but does not qualify to launch an offer under the new rules, the firm may switch to launching a rights issue as long as it meets the relevant requirements.