SGX Rulebooks
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1015

(1)
(a) Where an acquisition of assets (whether or not the acquisition is deemed in the issuer's ordinary course of business) is one where any of the relative figures as computed on the bases set out in Rule 1006 is 100% or more, or is one which will result in a change in control of the issuer, the transaction is classified as a very substantial acquisition or reverse takeover respectively. The issuer must, after terms have been agreed, immediately announce the following :—
(i) the information required in Rules 1010, 1011, 1012 and 1013, where applicable; and
(ii) the latest three years of proforma financial information of the assets to be acquired.
(b) The acquisition must be made conditional upon the approval of shareholders and the approval of the Exchange.
(2) For very substantial acquisition, the target business to be acquired must be profitable and meets the requirement in Rule 210(4)(a), and the enlarged group must comply with the requirements in Rule 210(5) and (6). The issuer must appoint a competent and independent valuer to value the assets. The Exchange may approve the very substantial acquisition unconditionally or subject to condition(s), or may reject, as it thinks appropriate.
(3) For reverse takeovers, the incoming business and the enlarged group must comply with the following requirements:—
(a) The requirements in Rule 210(1), (2)(a) or (b) or (c), (3), (4), (5), (6), (7), Part VIII of Chapter 2 and, if applicable, Rule 222. A life science company may rely on the exceptions specified in Rule 210(8). A mineral, oil and gas company must fulfil the additional listing requirements in Rule 210(9). The issuer must appoint a competent and independent valuer to value the incoming business. For the avoidance of doubt, any profit guarantee granted by the vendors will not be taken into consideration for the purpose of compliance with Rule 210(2);
(b) The reference to "invitation shares" in Rule 210(1)(a) means the minimum prescribed public float based on the total number of issued shares excluding treasury shares of the enlarged group, being 25% for SGX Mainboard issuers.
(c) The requirements specified in Rules 227, 228 and 229 are applicable to:—
(i) persons who are existing controlling shareholders or who will become controlling shareholders of the issuer as a result of the asset acquisition; and
(ii) associates of any person in (i).
This is also applicable to very substantial acquisition.

The applicable period of moratorium in Rule 229 will commence upon resumption of trading of the securities.
(d) Where the consideration for the acquisition of assets by the issuer is to be satisfied by the issue of shares, the price per share of the issuer after adjusting for any share consolidation must not be lower than S$0.50.
(4) The issuer must submit the following:—
(a) A compliance checklist for Rule 210 or Rule 222, whichever is applicable;
(b) A compliance checklist for the information required in Rule 1015(5);
(c) For reverse takeovers, declaration by each of the enlarged group's (and where applicable REIT manager's or trustee-manager's) director, executive officer, controlling shareholder, controlling unitholder (where applicable), and officer occupying a managerial position and above who is a relative of such director, controlling shareholder or controlling unitholder (where applicable), in the form set out in paragraph 8, Part 7 of the Fifth Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018, as amended from time to time. For very substantial acquisitions, this requirement applies only to each new relevant person; and
(d) For reverse takeovers, resumes and particulars of each of the enlarged group's (and where applicable REIT manager's or trustee-manager's) director, executive officer, controlling shareholder and controlling unitholder (where applicable), and if the controlling shareholder or controlling unitholder (where applicable) is a company or partnership, resumes and particulars of each of its director, executive officer, controlling shareholder and partner. In the case where such entity is listed on a stock exchange and the relevant information relating to each relevant person is publicly available, this requirement is not applicable, but the Exchange must be informed of any material changes.
(5) In relation to the assets to be acquired, the shareholders' circular must contain the following:—
(a) Information required by Rules 1010, 1011, 1012, 1013 and Part II of Chapter 6 of the Listing Manual, where applicable;
(b) An accountants' report on the assets to be acquired and the enlarged group. Rule 609 applies to the accountant's report;
(c) A statement by the directors in the form set out in Practice Note 12.1; and
(d) A statement by the issue manager(s) and/or financial adviser(s) in the form set out in paragraph 3.1 of Practice Note 12.1.
(6) The Exchange may suspend the securities of the issuer until:—
(a) the information required in Rule 1010 has been announced (unless the only information missing is insignificant); and
(b) the issuer has satisfied the Exchange that it meets the admission requirements set out in Rule 1015(3)(a) and (b).
(7) Rule 1015 does not apply in the case of an acquisition of profitable asset(s) if the only limit breached is Rule 1006(b).
(8) Rule 113(2) applies to an issuer which is the subject of a reverse takeover, with the necessary adaptations.
(9) Where a very substantial acquisition or reverse takeover is not completed or is rescinded by any party to the transaction due to any reason, the issuer must immediately announce via SGXNET the following:
(a) the reasons for the non-completion or rescission of the transaction;
(b) the financial impact of the non-completion or recission on the issuer; and
(c) the possible course(s) of action to protect the interests of the shareholders of the issuer. Notwithstanding this, the issuer must provide timely updates on the specific course of action including its progress and outcome.

Amended on 29 September 201129 September 2011, 10 August 201210 August 2012, 27 September 201327 September 2013, 23 August 201823 August 2018, 10 January 202010 January 2020 and 7 February 20207 February 2020.

1016

Where the assets being acquired are listed on the Exchange, Rule 1015(3)(a) is not applicable.

Amended on 10 August 201210 August 2012.

1017

The Exchange normally applies the same criteria for assessment of IPO to reverse takeovers and may modify any requirement in this Chapter or impose additional requirements if it considers it appropriate, taking into account the rationale for the acquisition, the nature of the issuer's business and its track record.

Amended on 10 August 201210 August 2012.

1018 Cash Companies

(1) If the assets of an issuer consist wholly or substantially of cash or short-dated securities, its securities will normally be suspended. The suspension will remain in force until the issuer has a business which is able to satisfy the Exchange's requirements for a new listing, and all relevant information has been announced. Upon completion of the disposal of its operations and/or assets, the issuer must:—
(a) Place 90% of its cash and short-dated securities (including existing cash balance and the consideration arising from the disposal(s) undertaken by the issuer) in an account opened with and operated by an escrow agent which is part of any financial institution licensed and approved by the Monetary Authority of Singapore. The amount that is placed in the escrow account cannot be drawn down until the completion of the acquisition of a business which is able to satisfy the Exchange's requirements for a new listing, except for payment of expenses incurred in a reverse takeover approved by shareholders and pro-rata distributions to shareholders; and
(b) Provide monthly valuation of its assets and utilization of cash, and quarterly updates of milestones in obtaining a new business to the market via SGXNET.
Taking the above compliance into account, the Exchange may allow continued trading in a cash company's securities on a case-by-case basis, subject to:—
(c) Contractual undertakings from the issuer's directors, controlling shareholders, chief executive officer and their associates to observe a moratorium on the transfer or disposal of all their interests, direct and indirect, in the securities of the issuer; and
(d) The period of the moratorium must commence from the date shareholders approve the disposal of business, up to and including the completion date of the acquisition of a business which is able to satisfy the Exchange's requirements for a new listing.
(2) The Exchange will proceed to remove an issuer from the Official List if it is unable to meet the requirements for a new listing within 12 months from the time it becomes a cash company. The issuer may apply to the Exchange for a maximum 6-month extension to the 12-month period if it has already signed a definitive agreement for the acquisition of a new business, of which the acquisition must be completed in the 6-month extension period. The extension is subject to the issuer providing information to investors on its progress in meeting key milestones in the transaction. In the event the issuer is unable to meet its milestones or complete the relevant acquisition despite the time extension granted, no further extension will be granted and the issuer will be removed from the Official List and a cash exit offer in accordance with Rule 1309 should be made to the issuers' shareholders within 6 months.

Amended on 7 October 20157 October 2015.