Key changes in main market listing requirements for Bursa Malaysia, for PN17, PN16 and Defaulters. (Listing Requirements changes)

1. THE MAIN MARKET
Key Changes to the LR
- PN17 Companies
- Cash Companies
- Default in Payment
6 July 2009
Ch’ng Boon Huat,
Head, Issuers Investigation & Surveillance

2. Key Changes to Requirements for
Key Changes to Requirements for
PN17 Companies
PN17 Companies
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3. Statistics of Financially Distressed Companies
Statistics of Financially Distressed Companies
• Statistics of Amended PN17, PN17 and PN4 companies as at 31
May 2009
PN Outstanding Regularised De-listed
Amended PN17 40 7 34
PN17 2 13 7
PN4 1 87 40
Total 43 107 81
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4. PN17 Co. -- Change of Prescribed Criteria
PN17 Co. Change of Prescribed Criteria
Amendment to shareholders’ equity criterion
Existing Criteria Main LR
(a) shareholders’ equity (a) shareholders’ equity
(a) shareholders’ equity
(SE)
•
• ≤ 25% of the issued & paid-
≤ 25% of the issued & paid-
• ≤ 25% of the issued & up
up capital
capital (excluding
(excluding
paid-up capital treasury shares)
treasury shares)
• < minimum issued and •
• < RM40 million
< RM40 million
paid-up capital
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5. PN17 Co. --Change of Prescribed Criteria (Cont’d)
PN17 Co. Change of Prescribed Criteria (Cont’d)
No change to other Prescribed Criteria
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6. PN17 Co. – Regularisation Flowchart
PN17 Co. – Regularisation Flowchart
Trigger PN17 Criteria
First Announcement
Within 3 months
Announce whether Plan will
result in Significant in
Business Direction/ Policy
Within 12 months Within 12 months
Significant NO Significant
Submit Plan to SC Submit Plan to Bursa
Securities and procure
approval
To obtain SC approval Within 6 - 12
months
Implementation
Implementation
Immediately after
implementation
- to report a net profit in 2
consecutive quarterly results
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7. PN17 Co. – New Requirements on Regularisation Obligations
PN17 Co. – New Requirements on Regularisation Obligations
Announce within 3 months from FA - whether the
Disclosure
Disclosure reg. plan will result in a significant change in
business direction/policy
If reg. plan will result in significant change in the business
direction or policy –
(a) submit plan to SC for approval, within 12 months from FA
date; and
(b) complete implementation within timeframe prescribed by
SC.
Obligation to
Obligation to
Regularise
Regularise
If reg. plan will not result in significant change in the business
direction or policy –
(a) submit plan to Bursa & obtain Bursa’s approval within 12
months from FA date;
(b) complete implementation of the plan within 6 – 12* months
from plan approval date; and
Must record net profit in 2 consecutive quarterly results
immediately after completion - quarterly results subject to
* For plan which involves Court proceeding limited review by external auditor
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8. Regularisation Plan
Regularisation Plan
•• Sufficiently comprehensive, capable of resolving all
Sufficiently comprehensive, capable of resolving all
problems, financial or otherwise
problems, financial or otherwise
•• Enable to regularise its financial condition and level
Enable to regularise its financial condition and level
of operations
of operations
•• Fair and reasonable to the company and
Fair and reasonable to the company and
shareholders & increase shareholder value
shareholders & increase shareholder value
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9. Regularisation Obligations
Regularisation Obligations
Failure to Comply with
Failure to Comply with
Obligations to
Obligations to
Regularise
Regularise
Trigger Prescribed
Trigger Prescribed Must undertake aareg. plan which will result
Must undertake reg. plan which will result
Criteria Within 3 Years
Criteria Within 3 Years in aa significant change in its business
in significant change in its business
After De-classified as direction or policy
direction or policy
After De-classified as
PN17 Co.
PN17 Co.
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10. Key Changes to Requirements for
Key Changes to Requirements for
Cash Companies
Cash Companies
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11. What is a Cash Company?
What is a Cash Company?
A listed issuer whose assets on a
A listed issuer whose assets on a
consolidated basis, consist of 70% or
consolidated basis, consist of 70% or
Criteria
more of cash or short term investments,
more of cash or short term investments,
or a combination of both (“Cash
or a combination of both (“Cash
Criterion”)
Criterion”)
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12. Cash Co. – Regularisation Flowchart
Cash Co. – Regularisation Flowchart
Trigger Cash Criteria
Notify Bursa Securities in writing
immediately upon receipt of the
Exchange’s notice that it is a
Cash Company
Announcement
Within 12 months Submit proposal to acquire a new
core business to SC
Obtain SC approval
Within the timeframe
prescribed by SC
Implementation
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13. Cash Co. – New Requirements
Cash Co. – New Requirements
Place > 90% cash & short-dated securities
with account opened and operated by a
custodian – cannot withdraw except for
- to implement reg. proposal; or
- to distribute to shareholders on pro-rata
basis if fails to regularise
Cash
Company
Submit Proposal to Acquire
Failure to regularise New Core Business to SC for
- May be suspended & delisted Approval within 12 months &
- Must distribute money in Implement within SC’s
account to shareholders on timeline
pro-rate basis

14. Transitional Arrangements for
Transitional Arrangements for
Cash & PN17 Companies
Cash & PN17 Companies
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15. Transitional Arrangements for
Transitional Arrangements for
Cash & PN17 Companies
Cash & PN17 Companies
Existing Cash & PN17 Company may apply to Bursa to
Existing Cash & PN17 Company may apply to Bursa to
regularise its condition under new framework
regularise its condition under new framework
PROVIDED THAT --
PROVIDED THAT
it is still within the stipulated or extended timeframe to
it is still within the stipulated or extended timeframe to
submit its proposal or plan to regularise its condition
submit its proposal or plan to regularise its condition
under the Amended PN17 Framework.
under the Amended PN17 Framework.
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16. Key Changes to Practice Note 1
Key Changes to Practice Note 1
Default in Payment
Default in Payment
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17. PN1 – Amendments to Event of Default
PN1 – Amendments to Event of Default
General - default not dependent on demand
Existing Provisions Main LR
(a) Default for credit facility is ≥ 5%
(a) Default where the total amount
(a) Default where the total amount
of PLC’s net assets outstanding of the defaulted credit
outstanding of the defaulted credit
facility is ≥ 5% of PLC’s net assets
facility is ≥ 5% of PLC’s net assets
(b) Default which has material effect (b) Clarify that where a PLC has a
(b) Clarify that where a PLC has a
on the price, value or market activity negative net asset, any amount in
negative net asset, any amount in
default will be considered as material
default will be considered as material
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18. PN1 – Amendments to Event of Default
PN1 – Amendments to Event of Default
No change to other Event of Defaults
Event of
Defaults
default in
default in default in
default in
payments of
payments of payments
payments
interest in respect
interest in respect under aa
under
of loan stocks or
of loan stocks or debenture;
debenture;
bonds, whether
bonds, whether
listed or unlisted
listed or unlisted
on the Exchange
on the Exchange default in principal
default in principal
payments in respect of
payments in respect of
loan stocks or bonds,
loan stocks or bonds,
whether listed or unlisted
whether listed or unlisted
on the Exchange
on the Exchange

19. PN1 – Amendments to Definition of Solvency
PN1 – Amendments to Definition of Solvency
Existing Provisions Main LR
(c) “Solvent” if majority directors (c) “Solvent” if majority directors
(c) “Solvent” if majority directors
forms the opinion that PLC will be forms the opinion that PLC will be
forms the opinion that PLC will be
able to pay all its debts within 12 able to pay all its debts as and when
able to pay all its debts as and when
months from announcement date they fall due within 12 months from
they fall due within 12 months from
announcement date
announcement date
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20. PN17 Co. --Definition of “net profit”
PN17 Co. Definition of “net profit”
Net profit after minority interest and excludes one off
Net profit after minority interest and excludes one off
items, such as --
items, such as
(i) interest waiver;
(i) interest waiver;
(ii) negative goodwill credited to income statement;
(ii) negative goodwill credited to income statement;
(iii) gain/loss arising from sale of investment in
(iii) gain/loss arising from sale of investment in
associated companies/subsidiaries or land and building;
associated companies/subsidiaries or land and building;
and
and
(iv) restructuring cost.
(iv) restructuring cost.
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21. Cash Co. – Definition of “Custodian”
Cash Co. – Definition of “Custodian”
“Custodian” means any of the following who is independent
“Custodian” means any of the following who is independent
of the Cash Company:
of the Cash Company:
(a) a trust company registered under the Trust Companies
(a) a trust company registered under the Trust Companies
Act 1949 or incorporated pursuant to the Public Trust
Act 1949 or incorporated pursuant to the Public Trust
Corporation Act 1995 and is in the List of Registered Trustees
Corporation Act 1995 and is in the List of Registered Trustees
in relation to Unit Trust Funds issued by the SC; or
in relation to Unit Trust Funds issued by the SC; or
(b) a licensed bank or merchant bank as defined in the
(b) a licensed bank or merchant bank as defined in the
Banking and Financial Institutions Act 1989.
Banking and Financial Institutions Act 1989.

22. Thank You
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