Catalyst Board to facilitate SOEs listings

The Colombo Stock Exchange (CSE) has amended the Listing Rules to facilitate the listing of shares issued by State Owned Enterprises (SOEs) on a new board under the Main Market Segment of the CSE, identified as the `Catalyst Board’.

The amendments were approved by the Securities and Exchange Commission and the revised rules are effective from October 1, Renuke

Wijayawardhane, Chief Regulatory Officer CSE told the Business Times.

The rules require the applicant entity to be a body corporate establishment incorporated under the Companies Act or any other written law, and of which the government shall have ownership of more than 50 per cent of the voting shares or the right to appoint the majority of the directors of this entity.

The stated capital to list on the Catalyst board is Rs. 250 million. The entity should have an operating history of three years. It should have positive net assets for the past year as per the audited financial statements made up to a date not more than 12 months immediately preceding the date of the initial listing application to the CSE or the unaudited financial statements made-up to a date not more than nine months immediately preceding the date of the initial listing application which have been reviewed through a review engagement done by the Auditor consistent with the Sri Lanka standards on review engagements. “Depending on the model that the government has adopted to list or shed shares of a stateowned enterprise, an entity can be listed on the Catalyst Board,” Mr. Wijayawardhane said.

Most SOEs depend on government funding and local and foreign borrowings for expansion and modernisation. By listing on the stock exchange these enterprises will be able to improve their internal governance, and operating efficiencies and attract foreign and local investor capital.