SGX introduces measures to advance catalist transition

SGX introduces measures to advance catalist transition

24/07/09

Singapore Exchange Limited (“SGX”) announced today further measures to advance the transition progress of Catalist Non-sponsored (“NS”) companies for the development of Catalist, its sponsor-supervised board for fast growing companies. The measures serve to provide financial assistance and time relief to Catalist-NS companies in view of the prevailing economic conditions.

Loan guarantee scheme for Catalist-NS companies

SGX is introducing a loan guarantee scheme where Catalist-NS companies can each obtain a one-time loan of up to $50,000 for fees payable to its Catalist Sponsor (“Sponsor”). This is to help Catalist-NS companies with potential short-term funding needs. Hong Leong Finance Limited based on its credit criteria and processes will provide the loans under the scheme. The loans will be disbursed directly to the respective Sponsors of the borrowers. SGX supports the scheme by providing a guarantee to cover 90% of each loan subject to a total loan amount of S$5 million under the scheme. With the SGX guarantee, borrowers need not pledge any other security or provide any other guarantee. The loan will be for a two-year period. The loan application period will start on 3 August 2009 and end on 30 October 2009, with drawdown no later than 31 December 2009.

The scheme is open to all Catalist-NS companies, including those have already engaged a Sponsor.

Please refer to Appendix 1 for details of the scheme.

Extension of deadline and introduction of share trading suspension

 

Under current rules, Catalist-NS companies who have not engaged a Sponsor by the transition deadline, 5 February 2010, may face delisting. With the introduction of this measure, Catalist-NS companies without a Sponsor after the deadline are subject to a share trading suspension until 31 December 2010. The share trading suspension allows further time reprieve for Catalist-NS companies and their shareholders to engage Sponsors or undertake corporate actions to maintain their listing status. Share trading will resume upon a company completing either of the above actions. Catalist-NS companies without a Sponsor after 31 December 2010 will be delisted.

Please refer to Appendix 2 for the revised Practice Note 14A of the Catalist Rules pertaining to the above changes.

Since the launch of Catalist in February 2008, SGX had worked with Sponsors to introduce various initiatives to facilitate a smooth transition of Catalist-NS companies onto the sponsorship regime. These include an early-bird engagement discount scheme, a forward engagement scheme and quarterly progress reports on the appointment of Sponsors. The two schemes provided assistance to Catalist-NS companies in their Sponsor appointment, while the progress reports provided shareholders with updates of the Catalist-NS companies’ transition plans.

Out of the total of 154 Catalist-NS companies at the inception of Catalist, 44 companies have appointed Sponsors, 28 of them have transferred to SGX Mainboard and 6 companies have been delisted. Currently, 76 companies have not engaged a Sponsor. Based on the latest progress reports by these companies, 66 have indicated intent to appoint a Sponsor before the transition deadline. Six companies have indicated their intent to transfer to Mainboard or pursue a restructuring exercise to maintain listing.

SGX has been expanding the pool of Sponsors with diverse backgrounds to allow for a competitive environment for sponsorship services and wider choices to meet varied needs of companies. There is a current pool of 19 approved Sponsors comprising 11 Full Sponsors and 8 Continuing Sponsors. For a complete list of Sponsors, please visit the Catalist website at www.sgxcatalist.com.

Mr Lawrence Wong, Executive Vice President and Head of Listings at SGX, said, “The Catalist regime is an important development for our marketplace with its emphasis on providing Sponsor guidance and supervision for the benefit of Catalist companies. In this current environment, our measures aim to strike a balance between the development of Catalist and the interests of its various stakeholders, including the need of shareholders for certainty on the continuing listing of companies they have invested in.”

Appendices