What is the impact of the latest ASX Capital raising Rule changes?
We are delighted to note that the ASX has made significant improvements to its original proposal to change the capital raising rules for ASX listed companies.
The ASX’s original “placement mandate” would have authorised boards of sub-$300 million companies to issue up to 25% of equity in 12 months on a non-pro rata basis. We don’t need to explain the dilutionary impact that could have on smaller shareholders.
The following table outlines elements of the ASX’s new proposal and why I agree that the changes represent an improvement.
The changes have received regulatory approval and will be effective immediately.
Just watch out for companies seeking general approval to raise the money for no stated commercial purpose. If they seek a general approval I would ‘generally’ vote against it.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
