ASIC announces end date for temporary capital raising relief
Corporate News - 23 June 2020
Following two months of significant capital raising activity across Australia with over A$20 billion raised, the Australian Securities & Investments Commission (ASIC) has announced that the temporary capital raising measures which permit 10 day suspension periods for low doc capital raisings will end on 2 October 2020 (6 months after they commenced) (ASIC Relief).
The ASIC Relief was introduced on 2 April 2020 and allows low doc placements, entitlement offers and share purchase plans (SPPs) where an entity had been suspended for a total of up to 10 days in the 12 months before the offer provided the entity had not been suspended for more than five days in the period commencing 12 months before the offer and ending 19 March 2020. ASIC has advised that it will continue to monitor the appropriateness of the ASIC Relief in light of the uncertain impacts of COVID-19 and will end or extend the relief as appropriate. In doing so, ASIC will consider the extent of raisings conducted in reliance of the ASIC Relief, the length of the suspension required to execute the capital raising, market volatility and the extent and impact of any easing of government restrictions in relation to COVID-19.
We have assisted a number of clients with their capital raising efforts during COVID-19 including where companies have sought to rely on the ASIC Relief as well as the suite of temporary measures established by the Australian Securities Exchange (ASX) by way of a number of class waivers (ASX Relief) (as discussed in a previous article). Almost every capital raising in the last two months has featured a placement and many of those have utilised the extra placement capacity offered under the ASX Relief. Placements with follow-on SPPs have been the preferred structure for large raisings. We note, however, that currently the ASX Relief is due to expire on 31 July 2020.
Any entities wishing to raise capital or require further advice in relation to any of the relief measures should contact us in our Perth office on +61 8 9321 4000 or our Melbourne office on +61 3 9111 9400 as we would be happy to assist.