Capital Raising by Companies During the COVID-19 Crisis: An Analysis of Recent ASX Reforms

Company and Securities Law Journal, Vol. 37, No. 7, 2020, pp. 502-507

10 Pages Posted: 1 Sep 2020

See all articles by Lloyd Freeburn

Lloyd Freeburn

University of Melbourne

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: July 30, 2020

Abstract

The effects of the COVID-19 crisis have driven many listed Australian companies to raise emergency capital. These share issues have been facilitated by a relaxation of the rules applying to capital raising by the Australian Securities Exchange, a move supported by the Australian Securities and Investments Commission. The reforms to the rules draw on the experience of the financial crisis in 2008 - 2009. They are designed to assist companies adversely affected by the COVID-19 crisis to raise capital to survive the crisis. The nature of the reforms and the capital raisings to which they relate have been the subject of competing concerns. In particular, the enhanced disclosure requirements that have accompanied the relaxation of the capital raising rules have been criticised by some as unwarranted and by others as insufficient. In this research note, the authors provide information on the number of capital raisings since the beginning of COVID-19 and evaluate the competing arguments regarding the recent capital raising reforms.

Keywords: capital raising; Australian Securities Exchange; COVID-19

Suggested Citation

Freeburn, Lloyd and Ramsay, Ian, Capital Raising by Companies During the COVID-19 Crisis: An Analysis of Recent ASX Reforms (July 30, 2020). Company and Securities Law Journal, Vol. 37, No. 7, 2020, pp. 502-507, Available at SSRN: https://ssrn.com/abstract=3683703 or http://dx.doi.org/10.2139/ssrn.3683703

Lloyd Freeburn

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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