China Administrative Measures for Material Asset Reorganization of Listed Companies (the “Measures”) has been amended by China Securities Regulatory Commission (CSRC).
Any reorganization subject asset in the context of back-door listing should meet, among other things, particular financial standards and existence term requirement and it also require that any company intended for back-door listing should be subject to the persistent supervision by an independent financial adviser and the supervision period shall last no less than three fiscal years from the date when CSRS approves its application for material asset reorganization.
It is prescribed in Article 43 of the amended and restated Measures that a listed company issuing new shares as consideration for the assets it purchases may concurrently raise part of supportive funds by means of private placement and the price of new shares shall be determined in accordance with the prevailing, applicable rules and regulations.
It is explicitly prescribed in Article 5 of the amended and restated Measures that a listed company may, without change in its shareholders’ controlling right, offer new shares to specified offerees as consideration for the assets to be purchased by the listed company for the purpose of promoting industrial integration and enhancing synergy effect on its existing major business.