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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Brightoil explains how new exchange rules could affect its listing status

New Aug 1 rule changes will make it easier for SEHK to expel companies.

Brightoil Gem and Wavemaster 3, pictured in the Singapore Strait. Image credit: Thomas Timlen Flickr CC BY 2.0

Updated on 13 Jul 2018 12:32 GMT

Brightoil Petroleum (Holdings) Ltd has issued an announcement to explain how the company's listing status could be affected by upcoming amendments to the delisting framework of the Stock Exchange of Hong Kong (SEHK).

On August 1, SEHK is due to implement a number of changes to its Listing Rules, which include: being able to delist an issuer after a trading suspension of 18 continuous months; and being able to delist the issuer immediately in "appropriate circumstances".

Furthermore, following the delisting framework amendments, SEHK will be able to publish a delisting notice stating its right to delist an issuer if the issuer fails to resume trading within the period specified in the notice; and will remove a three-stage delisting procedure for issuers without sufficient operations or assets, which will no longer be needed after the new delisting process takes effect.

Prior to the amendments - and unlike markets such as London, New York and Tokyo - Hong Kong has not had an effective mechanism in place to forcibly expel listed companies, which has resulted in firms suffering serious losses not being expelled, for example.

The existing three-stage delisting procedure can take more than 18 months because the commencement of each stage is a decision of the exchange that requires an assessment of the viability of any resumption proposal submitted by the issuer.

Delistings from leading global exchanges can be for a number of reasons, including failure to meet an exchange's minimum requirements for price, capitalisation or liquidity; failure to file reports; and also, in extreme cases, fraud.

And with just over three weeks before the new delisting rules in Hong Kong become effective, Brightoil explained on Friday that, as the company's shares will have been suspended from trading for less than 12 months prior to the August 1 implementation date, SEHK may, under Rule 6.01A(2)(b)(i), cancel the company's listing if trading in the company's shares remain suspended for 18 continuous months after August 1 - on January 31, 2020.

Additionally, Brightoil noted that it will need to meet SEHK's list of conditions for the resumption of trading, received in December, in order to avoid a delisting.

"If the Company fails to fulfil all the resumption conditions to the Stock Exchange's satisfaction and resume trading in its shares by the Expiry Date, the Listing Department will recommend the Listing Committee to proceed with the cancellation of the Company's listing," Brightoil said.

"Trading in the Company's shares on the Stock Exchange will remain suspended until further notice," Brightoil added.

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