SGX RegCo proposes faster restructuring process for businesses grappling with bankruptcy and excessive debt

SINGAPORE: The regulatory arm of the Singapore Exchange, SGX RegCo, proposes faster company restructuring for businesses grappling with bankruptcy, insolvency, and excessive debt, The Edge Singapore reports.

The suggested revisions aim to facilitate more efficient restructuring for issuers, alleviating the regulatory burden associated with managing financial affairs and meeting critical deadlines.

Under Singapore’s Insolvency, Restructuring and Dissolution Act (IRDA), implemented in 2018, these regulations were not integrated into SGX’s listing rules, as noted by Tan Boon Gin, CEO of SGX RegCo.

SGX RegCo anticipates that these changes could enhance the likelihood of “white knight rescues” where willing parties inject fresh capital and prompt trading resumptions.

Such actions are deemed more beneficial for shareholders than protracted legal proceedings that can further deplete a company’s already scarce resources.

Among the proposed changes are guiding financially distressed issuers in applying to SGX RegCo for permission to continue or resume trading their listed securities.

Additionally, it is recommended that announcements be made immediately when a financially troubled issuer or any of its subsidiaries undergo a court-supervised moratorium.

Also, quarterly updates on the financial situation would be required instead of monthly updates.

Previously, shareholder approval was mandated for significant asset disposals by issuers and their subsidiaries. However, the proposed changes seek to eliminate this requirement.

These proposed changes are subject to public consultation until Mar 22. Tan says that these initiatives will help Singapore’s ambition to establish itself as a restructuring hub, “a dream articulated since before 2016.” /TISG

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