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ASX revises capital raising measures

The Australian Securities Exchange (ASX) has revised its temporary emergency capital raising measures that were put in place to assist companies during the COVID-19 crisis.

The ASX said the measures will be tightened as a result of the stabilisation of market conditions.

"From 15 September 2020, any entity wishing to rely on the measures must satisfy ASX that it is raising capital predominantly for the purpose of addressing the existing or potential future financial effect on the entity from the COVID-19 health crisis, and/or its economic impact," the ASX said.

"Since their introduction, the measures have facilitated a wider range of capital raisings for entities affected by current market dislocation."

The emergency measures were implemented back in March in response to the extreme market volatility being experienced.

It introduces two class order waivers to help listed entities affected by COVID-19 to raise urgently needed capital.

The ASX said the waivers will remain in place until 30 November 2020; companies will just need to adequately prove to the ASX that the capital raising is needed as a direct result of COVID-19.

"At the time of introducing the Class Waivers and throughout the period of their operation, ASX recognised, following consultation with stakeholders, that the volatile market environment presented significant challenges for many entities needing to raise capital, whether or not the entity was directly impacted by COVID-19," it said.

"Therefore, in addition to urgent capital raisings by entities directly impacted by COVID-19, the Class Waivers facilitated a wider range of capital raisings that were potentially affected by dislocation in the broader market environment."

The ASX also clarified, under the revisions, if a capital raising appears to have inequitable features for existing security holders, the ASX may withhold the benefit of the Class Waivers for that capital raising, even if the capital raising is specifically COVID-19 related and urgently needed.

Read our full COVID-19 news coverage and analysis here.

Read more: ASXCapital raisingAustralian Securities Exchange
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