By Caroline Henshaw
SYDNEY--Australia's dominant exchange operator on Wednesday released the outcome of its controversial new plans to make it easier for small to medium sized companies to raise capital for investment.
From next month, the new rules will allow companies outside of the ASX Ltd.'s (ASX.AU) top 300 stocks with a market cap of less than 300 million Australian dollars ($307 million) to raise up to a quarter of their market capital through placements every 12 months, up from the current cap of 15%.
But in an amendment to the original plans put forward in April designed to placate existing investors, ASX will require boards to seek a special resolution backed by at least 75% of shareholders at an annual general meeting for the placements, rather than a simple majority through an ordinary resolution.
The additional shares can only be issued at a maximum 25% discount to the market price and boards must also provide shareholders with details of the purpose, affect and allocation of the new shares.
ASX said in a statement that the rules "strike a balance between protecting the interests of shareholders and facilitating timely capital raisings by listed companies," and "will help keep Australia a leading market to list, raise funds and invest." The rules will be reviewed in two years, it added.
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(END) Dow Jones Newswires
July 24, 2012 23:44 ET (03:44 GMT)
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