Equity Instruments

Public Offering Placement (at discount)

Principles

• Offer for sale of shares at a discount causes dilution effect to the shareholders.  Therefore, offers must be reasonable and there must be a process that allows shareholders who are affected by dilution to take part in the consideration

Public Offering Placement (at discount) means in ​​the case of a listed company offering for sales of convertible shares or covertible securities, such as convertible debentures (CD) or warrant with the offering price lower than 90 percent of the market price, to a specific investor or group of investors whether in private or public.

Calculations of the offering price

• Shares                                       : offering price

• CD                                              : offering price of CD divided by convertible rate

• Warrant                                      : offering price + exercise price

• Shares with warrant                  : consider to separate offering price for shares and warrant
  
  

Public Offering Placement (PO Placement)

• Approval criteria is the same as an offer for sale of shares / CD / warrant to the public, as the case may be

• Must comply with criteria for protection of shareholders (notice calling letter, resolution of the shareholders' meeting, right to veto)
  
  

Definition of a market price can be one of the following:

1. Weighted average price (closing or average price of sale) for the past 7-15 consecutive business days before the date of price indication which is one of the following dates decided by resolution of the board of directors:
   

    

   a. ​The date of the board's resolution 
   b. ​The date of the resolution of the shareholders' meeting
   c.The first date of offer to investors
   d. The date investors can exercise their rights pursuant to CD / warrant

    

2. A price indicated by considering demand / supply, for instance, a price acquired by book building

3. A fair price calculated by a financial advisor
   
   

Criteria for protection of shareholders

​​a. Notice of calling the Shareholders' Meeting

 

1. ​Be delivered 14 days in advance of the meeting

2. Contains sufficient information, at least on the following matter: 

   
   
   • ​The objectives

      

   • The necessity for offering to sell at a discount

   • The offering price / exercise price

   • The market price being used to compare

   • Dilution

   • Opinions of the board of directors on the necessity / appropriateness of the market price being used and the method of price indication​

3. In case of a fixed price, it must identify a group of persons to whom it is expected to offer

4. The right to veto​​
   

5. Proxy authorization letter + information regarding independent directors
   
   

b. Shareholder Approval 

1. A vote of not less than three-fourths of the total number of votes of shareholders attending the meeting who are entitled to vote

2. Shareholders who veto the decision are not more than 10 per cent of the total number of votes of shareholders who attend the meeting