In rendering a delisting decision, an Indonesian stock exchange consults with the listing committee for its opinion. If the shares of the listed company are delisted, all types of securities of that listed company will also be delisted from the stock exchange. To decide a delisting proposal, the stock exchange reviews and examines statements and documents submitted by the listed company or other information. It not only takes into account the formal aspects, but also considers the substance of the requirements and the listing committee's opinion.
A delisting can be initiated by the listed company or the stock exchange.
When initiated by the listed company, the requirements are:
- The shares must have been listed for at least five years.
- The delisting proposal must be approved by the general meeting of shareholders of the listed company, to be decided by simple majority vote (that is, approved by a general meeting of shareholders attended by more than one-half of all legitimate shareholders or their proxies and approved by more than one-half of all votes legally cast in the meeting). If the quorum cannot be fulfilled in the first meeting, the number of minimum attendance can be reduced to one-third in the second meeting. These numbers can be further reduced in subsequent meetings based on a ruling by the district court.
- The listed company or another nominated company must acquire the shares of the disapproving shareholders at a price that is the highest of the following:
- the nominal value of the shares; or
- the highest market price of the shares in the two years before the announcement of the summon for the general meeting of shareholders (by factoring in any change of nominal value of the shares during this period), plus a premium in the amount equal to the investment rate of return for two years calculated at the initial shares price (when first listed) multiplied by the published interest rate of the Certificate of Bank Indonesia of three months or the interest rate of another equivalent government bond which prevails at the time the general meeting of shareholders on the delisting is held; or
- a price determined by an independent appraiser party listed with Bapepam, appointed by the listed company or its nominee and approved by the general meeting of shareholders.
When initiated by the listed company, the procedures are:
- The listed company must submit a delisting proposal to the stock exchange (even before publishing initial information disclosure to the public about the plan) that includes: (i) the reasons and purposes of the delisting; (ii) the party that will purchase the shares of the shareholders; and (iii) the estimated share price.
- An initial information disclosure must be made to the public through at least one nationwide circulated newspaper, which at least includes the above information together with an announcement about the summons to hold a general meeting of shareholders (these must also be provided to Bapepam).
- If the general meeting of shareholders approves the plan, the listed company must make information disclosure to the public through at least one nationwide circulated newspaper about the buyback terms and conditions, including: (i) the estimated share price; (ii) the party purchasing the shares and its relation with the listed company; (iii) the share purchasing period, which is at least five bourse days after the announcement of the resolution of the general meeting of shareholders; and (iv) the appointment of the stock broker.
- The stock exchange must be provided with the above information as soon as possible.
- The listed company should submit the share delisting application to the stock exchange, together with a report on the implementation of the share buyback scheme and an independent legal opinion that states that the share buyback process is in accordance with the prevailing regulations.
- The stock exchange suspends the trading of the shares.
- The delisting becomes effective when: (i) the listed company has fulfilled all of its obligations to the stock exchange; (ii) the listed company has paid a delisting fee equal to two times the listing fee of the latest year; and (iii) the stock exchange has issued its approval and announced it publicly.
The stock exchange may initiate a delisting if: the listed company has experienced a material adverse event (legally or financially), which has a negative influence on the business existence of the listed company, or its status as a public company, and if the listed company cannot show a sufficient recovery indication; or the shares of the listed company were suspended from trading at the regular market and the cash market, and were only traded at the negotiable market for the previous 24 months.
When initiated by the stock exchange, the procedures are:
- If there is an indication that the listed company has encountered a qualified experience, the exchange will conduct a hearing with the listed company.
- If the stock exchange decides to delist the shares, it will notify its decision and the delisting schedule to the listed company on the same bourse day as the day on which the decision was made and provide a copy to the Bapepam.
- The stock exchange must announce the delisting decision and schedule at the bourse at the latest at the beginning of the next bourse day after the decision date.
- If deemed necessary, the stock exchange may suspend trading of the shares for five bourse days and thereafter the shares will only be tradable on the negotiable market for the subsequent 20 bourse days before the effective date of the delisting.
- The delisting is effective on the date set in the delisting decision by the stock exchange and when the exchange announces this decision.
Satrya Wijaya Teja
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