China Securities Regulatory Commission, Measures for the Administration of Material Asset Reorganizations by Listed Companies

中国证券监督管理委员会上市公司重大资产重组管理办法

June 02, 2008 | BY

clpstaff &clp articles &

Threshold for recognition as material asset reorganizations raised.

Clp Reference: 3710/08.04.16 Promulgated: 2008-04-16 Effective: 2008-05-18

Promulgated: April 16 2008
Effective: May 18 2008

Applicability: These Measures shall govern asset transactions by listed companies and by the companies in which they have a controlling interest or which they control that involve the purchase or sale of assets outside the normal course of business activities or asset transactions carried out by other means and that reach a prescribed percentage and, as a result, cause a material change in the core business, assets and/or revenue of the listed companies (Material Asset Reorganization).

The issuance of shares by a listed company to purchase assets shall comply with these Measures.

When a listed company uses the proceeds of a share offering to purchase assets or make an investment outside the company in line with the purpose of such proceeds as disclosed in the securities offering documents approved by the China Securities Regulatory Commission, these Measures shall not apply (Article 2).

Main Contents: A Material Asset Reorganization shall be constituted when the purchase or sale of assets by a listed company and by the companies in which it has a controlling interest or that it controls reaches any of the following benchmarks:

(1) the total value of the assets to be purchased or sold accounts for at least 50% of the listed company's total asset value at period end on its audited consolidated financial accounting report for the most recent financial year;

(2) the operating revenue during the most recent financial year generated by the assets to be purchased or sold accounts for at least 50% of the listed company's operating revenue on its audited consolidated financial accounting report for the same period; or

(3) the net value of the assets to be purchased or sold accounts for at least 50% of the listed company's net asset value at period end on its audited consolidated financial accounting report for the most recent financial year and the amount thereof exceeds Rmb50 million (Article 11).

Related Legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; and PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p.31

Repealed Legislation: Circular on Several Issues Concerning Material Asset Purchases, Sales and Exchanges by Listed Companies, Dec 10 2001, CLP 2002 No.1 p.13

clp reference:3710/08.04.16(1)prc reference:证监会令第53号promulgated:2008-04-16effective:2008-05-18

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