SINGAPORE – Boustead Projects will be required to restore its free float should its parent company’s privatisation offer fall through, according to Singapore Exchange (SGX) listing rules and regulations.

A spokesman for Singapore Exchange Regulation (SGX RegCo) told The Business Times on Tuesday that in the event delisting conditions are not met and free float is lost, the company’s securities will be suspended.

All companies in such a situation are obliged thereafter to restore free float, for example, by way of a placement.

While SGX RegCo – the regulatory arm of the SGX – maintained that it is unable to comment on specific companies, it said those that do not restore their free float may be required to delist.

They must do so while still complying with existing rules regarding delisting – including the requirement that the deal’s independent financial adviser (IFA) opines that the exit offer is both fair and reasonable, added the regulator.

Its statement comes in response to BT’s queries regarding concerns that the Securities Investors Association (Singapore), or Sias, has concerns over continued acceptance of Boustead Singapore’s offer for its unit Boustead Projects, which would cause a drop in the free float of the latter company.

Sias founder and chief executive David Gerald on Monday called upon SGX RegCo to require Boustead Projects to restore its free float in the event of its loss, as the company “has not complied with the listing rules requirements on exit offer for delistings”.

As the appointed IFA has regarded the offer as “not fair” but reasonable, shareholders “should not fear that the company will be delisted even if they do not accept the offer”, Mr Gerald said.

This is because Boustead Singapore cannot exercise compulsory acquisition under SGX rules, though Mr Gerald warned Boustead Projects could face a delisting in the event that it loses its free float. THE BUSINESS TIMES