Capital Raising Relief – A Cautionary Tale

Co-Author by Rebecca Proudman

ASIC and ASX have both announced temporary changes to their respective regulatory regimes to facilitate capital raisings for listed entities in response to the economic impact of COVID-19. As more entities seek the relief available under these changes, the effects, benefits and limitations of these measures are becoming clearer.

While ASX has indicated that relief applications need not be solely or predominantly for the purposes of raising capital to address the impact of COVID-19 on a company's business, our experience is that both ASIC and ASX are heavily scrutinising all applications and querying the appropriateness of an entity being granted the benefit of the relief.