Singapore being one of the top financial centres in the world has seen in recent times an increase in the number of reverse takeover deals, where an existing listed company acquires a target by way of issuing shares. The moving spirit (founding director) of the Company would then raise funds to buy back his part of the business.
Reverse Takeover Singapore activity saw an upswing in the earlier part of 2013. My view is that this is due to the economic cycle whereby companies that did not do much fund raising by way of issuing new shares or accessing the capital markets, decide that they want to bring their company private. Then they find out that their Singapore listed company shells are worth money so decide to go in search for companies (with assets) that may be interested. Given that most companies are not doing well in terms of profits, Singapore has seen a slew of mining, oil and resource based companies looking to list in Singapore in the early part of this year.
Some key issues to consider if you own assets that you want to list indirectly by way of a reverse take over in Singapore.
- Whether the asset fulfills the financial criteria for listing in Singapore. Singapore has two boards for listing companies, namely the Main board and the Catalist board. You should get familiar with the difference between the two. The financial requirements for the Main Board are tougher but you gain access to investors (like funds) that invest in larger companies.
- The regulatory environment where your assets/business is located. Singapore has many PRC companies listed on its bourse but in recent times rules and regulations on PRC assets have been tightened. The Singapore exchange has asked listed companies to put steps in place to increase control of parents over the legal representatives in their PRC subsidiaries.
- Singapore has a regime to list mineral oil and gas companies. The Catalist listing manual allows companies with an exploratory angle (rather than a production story) to list.
If you have any queries about listings, reverse takeovers or IPOs in Singapore, please drop us a note and we will assist you. We can help arrange and put together a deal if your assets are listable in Singapore.