THE Singapore Exchange (SGX) has unveiled further measures to help listed companies raise funds in the face of the credit crunch.

The moves come on the back of measures unveiled last month making it easier for companies to undertake rights issues.

This time, the SGX has relaxed some regulations around share placements, scrip dividend schemes and the issue of new shares.

Companies will place out shares to various parties, which may include existing shareholders. But a placement to a substantial shareholder - someone holding 5per cent or more of the company - can be undertaken without having to get other shareholders' approval.

The move is subject to conditions, including one which states that the substantial shareholder is not on the board of directors.

Some retail shareholders do not like such placements as they feel that the preferred shareholders get to buy new shares at the placement price while the same offer is not extended to them.

The new measure takes effect immediately.

Another measure relating to placements is the price of the shares being issued.

The old rule stated that the discount for the shares could be a maximum of 10per cent, but SGX will now allow a discount of as much as 20per cent given certain conditions.

Shareholder approval will be required in these cases.

Another new move relates to the scrip dividend scheme. This means that shareholders get their dividend in the form of shares, not cash. Many companies are turning to scrip dividend schemes as a way of conserving cash.

The SGX now says that a company wishing to implement such a scheme does not need to seek shareholder approval as long as the company also offers investors a cash option.

Companies will also find it easier to issue up to 100per cent of share capital as long as they give a regular update on how they are using the proceeds.

Except for the change to placements to substantial shareholders, the other measures are in effect until Dec31 of next year and will then be reviewed.

While companies will now have more flexibility under the regulation changes, SGX says it is mindful that it should not be at the expense of shareholders.

Mr David Gerald, chief executive of the Securities Investors Association of Singapore, said: 'Sias understands these measures are due to the financial crisis and are temporary.'

LEE SU SHYAN

This article was first published in The Straits Times.