The JSE Consultation Paper issued in October 2022 proposes the following amendments…
The JSE Consultation Paper issued in October 2022 proposes the following amendments in a number of key areas:
Weighted voting structure Introduction of dual class shares offering as “weighted voting shares” (WVS). This will allow companies with WVS structure that meet existing Main Board entry criteria to list on the JSE. The WVS will not be listed/traded on the JSE. The WVS will not carry more than 20 votes per share. As a safeguard, the JSE proposes key governance arrangements as listing entry criteria including a bespoke enhanced voting process on certain items where all shares, including the weighted voting shares, carry one vote per share.
Furthermore, the WVS must have automatic conversion provisions into ordinary voting shares (OVS) in certain events; holders of OVS can allow an extension to the 10-year conversion provision (if they are not holders of WVS); holders of OVS must hold at least 10% of the economic interest; holders of OVS holding at least 10% of the total voting rights must have the ability to convene a general meeting; and holders of WVS must undertake that their entire shareholding will not be disposed of/transferred for 12 months. No further WVS can be issued save for rights offer, bonus issue, capitalisation issue, scrip dividend, consolidation, or sub-division.
Free float – new listings:
Reduction of the free float requirement from 20% to 10%, as a Main Board listing condition.
Free float assessment :
The replacement of the exclusion from public shareholders of those holding 10% or more of the securities of the relevant class (subject to certain circumstances) with the exclusion of the controlling shareholder/s and the introduction of a minimum number of shareholders of at least 100 shareholders.
Special Purpose Acquisition Company (SPAC):
Given the specific nature of SPACs, we do not provide details in this article other than to indicate that amendments and additions have been made in respect of the industry of the viable assets, the experience and expertise of the board of directors, the equity participation of the board of directors, conflicts of interest, redemption rights, SPAC and dual class shares, the initial period to complete acquisition of viable assets, escrow arrangements and the acquisition circular to shareholders. In addition, the Guidance Letter of 13 June 2017 relating to SPACs has been withdrawn.
How can we help:
Tamela provides ongoing sponsor, independent sponsor, and transaction sponsor services on the JSE Listings Requirements, including amendments thereto. For more information, please contact Mmakobela Mathabe on 073 336 0788 or Mmakobela@tamela.co.za.