You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 18, 2023

Thailand Approves New Private Placement Rules for Listed Companies

Subscribe to Updates

Thailand’s Office of the Securities and Exchange Commission (the “SEC Office”) has revamped various rules relating to private placements by listed companies with a view to streamlining the offering process and reducing the documentation required for submission to the SEC Office. Most of these rules were revised by the Capital Market Supervisory Board on December 28, 2022, and will come into effect on July 1, 2023.

The key amendments in the new rules are summarized below.

Elimination of Application Requirement

Issuers are no longer required to apply to the SEC Office prior to offering their shares via private placement, according to new rules laid out in the Notification of the Capital Market Supervisory Board No. TorChor 28/2565 Re: Permission for Listed Companies to Offer Newly Issued Ordinary Shares via Private Placement (the “TorChor 28/2565 Notification”). The rules detailed in this notification will replace the current private placement rules under the Notification of the Capital Market Supervisory Board No. TorChor 72/2558 Re: Permission for Listed Companies to Offer Newly Issued Ordinary Shares via Private Placement.

Under the TorChor 28/2565 Notification, issuers may offer their shares via private placements that are share offerings to no more than 50 high-net-worth or ultra-high-net-worth investors within 12 months, share offerings valued at no more than THB 20 million within 12 months, or share offerings to institutional investors (excluding share offerings to the issuer’s directors or employees), so long as the issuer complies with its information disclosure and corporate approval requirements, which remain mostly unchanged under the new notification.

To fulfill these requirements, notice of a shareholders’ meeting must be submitted to all shareholders at least 14 days in advance, and the offering must be approved by a supermajority vote of the shareholders, which means approval by at least three-fourths of the shareholders present and entitled to vote at the shareholders’ meeting. If the offering price is lower than the market price, there must be no veto of the offering by shareholders holding 10 percent or more of the total issued shares in aggregate (but see additional requirements described in the next section).

Thanks to this no-filing approach, the issuer can now place remaining shares from a rights offering (RO) or a preferential public offering (PPO) via private placement with more flexibility, provided that the issuer complies with the 14-day notice requirement, obtains a supermajority vote from the shareholders’ meeting, and receives a clear mandate from the shareholders’ meeting to place the shares at a price that is not lower than the offering price of the RO or PPO.

Submission of Independent Financial Advisory Opinion

Despite adopting this deemed-approval approach and eliminating the filing requirements, the Capital Market Supervisory Board has introduced a new requirement under the TorChor 28/2565 Notification requiring issuers to submit the opinion of an independent financial advisor (IFA) together with the notice of the shareholders’ meeting. This requirement, which does not apply to private placements of any remaining shares from an RO or PPO, is triggered for “material” offerings in any of the following cases:

  • The offering price is lower than the market price;
  • The offering of shares may result in any investor being a shareholder with the highest voting rights in a listed company—including shareholding by any person under Section 258 of the Securities and Exchange Act B.E. 2535, as amended (e.g., the investor’s spouse and minor children, any juristic person in which the investor together with his or her spouse and minor children has more than 30 percent shareholding, or any person having more than 30 percent shareholding in the investor as a juristic person); any concert party of the investor; and any person under Section 258 of the concert party of the investor; or
  • The offering of shares may affect the earnings per share dilution or control dilution of at least 25 percent of the number of paid-up shares before the date on which the board of directors resolved to propose the offering to the shareholders’ meeting.

The opinion of the IFA must contain at least the following information:

  • Appropriateness of the offering price and conditions of the offering;
  • Reasonableness and benefits of the offering to the investors, including the use of proceeds, in comparison with the impacts on the shareholders; and
  • An opinion (with reasons) on whether the shareholders should vote to approve the offering.

The issuer must submit the draft notice of the shareholders’ meeting and the draft opinion of the IFA to the SEC Office via the office’s e-submission system. The SEC Office will provide feedback within five business days of all documentation being submitted.

Simplification of Market Price Calculation

The TorChor 28/2565 Notification now provides that the issuer must first use the weighted average price of the shares as a benchmark to determine the market price, except when the weighted average price cannot be calculated or is not suitable due to the liquidity of the issuer’s shares. In such a case, the issuer must use the book-building price first, or the fair price determined by a qualified financial advisor if there is a reason the book-building price cannot be used.

In this regard, “weighted average price” means the weighted average price of the issuer’s shares traded on the Stock Exchange of Thailand over at least seven (but no more than 15) consecutive business days before the offering date. The offering date is figured as either the date on which the board of directors determined the offering price (if the board of directors received a mandate from the shareholders’ meeting to determine the offering price based on the market price), or the date on which the board of directors proposed the offering at a specific price to the shareholders’ meeting for approval.

Moreover, the board of directors may set the offering price higher than the calculated weighted average price or at a discount of up to 10 percent by taking into account the market conditions if there are reasonable grounds for doing so and the board of directors has considered the company’s best interests.

Clarification of Offering Period

The TorChor 28/2565 Notification also clarifies the offering period for each placement type. If a shareholders’ meeting grants the board of directors a mandate to determine the offering price based on the market price, the TorChor 28/2565 Notification requires that each placement be completed within five business days after each determination of the offering price by the board of directors, and the offering period cannot exceed 12 months from the shareholders’ meeting.

If the shareholders’ meeting approves a private placement at a specific price, the placement must be completed within three months from the shareholders’ meeting. After these three months, the board of directors may be authorized by the shareholders’ meeting to further determine the offering price based on the market price, in which case the offering period can be extended to a maximum of 12 months from the shareholders’ meeting, but each placement must still be completed within five business days after each determination of the offering price by the board of directors.

As for the placement of remaining shares from an RO or PPO, this must be completed within three months after the end of the subscription period of the RO or PPO.

For more details on these latest rules for private placements by listed companies, or on any aspect of complying with securities laws and regulations in Thailand, please contact Tilleke & Gibbins at [email protected] or [email protected].

Related Professionals

Practices

Capital Markets

Corporate/M&A

Location

RELATED INSIGHTS​ 

January 3, 2025
Thailand has adopted the OECD’s global minimum tax framework through the Emergency Decree on Top-Up Tax B.E. 2567 (2024). Published in the Government Gazette on December 26, 2024, this legislation implements a 15% global minimum effective tax rate for large multinational enterprise (MNE) groups. The emergency decree took effect on January 1, 2025. The emergency decree was enacted through expedited procedures to implement “pillar two” of the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 project’s Global Anti-Base Erosion (GloBE) Rules. This swift implementation ensures Thailand can collect relevant tax revenues and prevents potential revenue losses from MNEs that might otherwise shift profits to jurisdictions with lower tax rates or to countries that have already implemented similar top-up tax legislation. Key aspects of Thailand’s implementation of the global minimum tax through the emergency decree are described below. Top-Up Tax The emergency decree introduces a dual mechanism for collecting additional top-up tax from MNEs whose effective tax rate falls below 15%. The first mechanism is a domestic top-up tax that targets MNEs operating within Thailand when their local effective tax rate is lower than 15%. The second mechanism is the income inclusion rule, which determines when a company’s foreign income should be included in the parent (main) company’s taxable income. This rule applies to Thai-based entities—including ultimate parent entities (UPE), intermediate parent entities, and partially owned parent entities—that hold ownership stakes in low-tax foreign jurisdictions. Scope MNEs subject to Thailand’s implementation of the global minimum tax framework are defined in the emergency decree as those whose UPEs report consolidated revenue of at least EUR 750 million (approximately THB 28 billion) in at least two of the four accounting periods preceding the relevant fiscal year. Reporting and Payment In-scope MNEs must comply with specific reporting obligations to the Thai Revenue Department. The filing deadline is set
Read More
December 20, 2024
With intellectual property playing an ever-increasing role in economic development, the need to harness, promote, and protect ASEAN innovation remains urgent as integration progresses. Among its objectives, the ASEAN Economic Community aims to transform the region into a hub of innovation and competitiveness and ensure that the region remains an active participant in the international IP community. With ASEAN member states increasing IP generation and further committing to global IP regimes, the region is increasingly looking toward sophisticated IP ownership and holding structures. IP Holding Companies ASEAN-based companies continue to centralize ownership of their IP assets in offshore holding and licensing vehicles—an approach multinational companies headquartered elsewhere have been using for a number of years. IP-intensive companies look to locate their IP portfolios in low-tax jurisdictions with strong IP registration and protection laws. The company then licenses the IP to operating companies in the group or to third-party licensees, franchisees, agents, distributors, and other partners in return for royalties or license fees. These special-purpose vehicles are typically referred to as IP holding companies. IP holding companies are popular because they can help corporations minimize tax, gain tax benefits or concessions, protect IP from bankruptcy or other claims against the parent company, and focus management attention on the IP portfolio as an income generator. Tax and IP Holding Companies Tax is the primary reason most companies park their IP in separate IP holding vehicles. Sometimes, companies choose to establish their IP holding company in a no-tax, low-tax, or preferred-tax jurisdiction close to their home country. The selected jurisdiction should also be a country with a large and well-established tax treaty network. Double taxation treaties are key considerations in jurisdiction shopping. If the IP assets need to be pledged as security for future borrowings or if they are to be included
Read More
December 4, 2024
Tilleke & Gibbins has contributed the Cambodia, Laos, Myanmar, Thailand, and Vietnam chapters to Restructuring in Southeast Asia, a comparative guide produced by Drew Network Asia (DNA). The publication outlines the principal debt restructuring processes available to corporate debtors across nine Southeast Asian jurisdictions and provides an accessible overview for lenders, creditors, and companies navigating financial distress in the region. Structured in a question-and-answer format, each jurisdictional chapter addresses the same core topics, allowing readers to compare approaches across markets. The guide covers key issues such as available restructuring mechanisms, court-supervised and out-of-court options, the roles and powers of creditors, and the implications of restructuring on ongoing business operations. As with other DNA resources, the guide aims to provide practical orientation rather than exhaustive analysis. Legislative developments and jurisdiction-specific considerations may affect the applicability of certain procedures, and readers requiring tailored advice are encouraged to contact the practitioners listed at the end of each chapter. The full guide is available for download using the button below or directly from the DNA website.
Read More
December 4, 2024
Thailand Legal Basics, a valuable primer for foreign investors, explores all aspects of living and doing business in Thailand. Written by specialists at Tilleke & Gibbins in Bangkok, it is the only comprehensive English-language guide to the Thai legal system with a focus on the concerns of foreign business and investment.
Read More