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Share Repurchase
One of the financial instruments to manage a company's liquidity when its share price is below the fair value and its retained earnings and financial liquidity exceed what is needed to run the business at the time. The treasury shares will not be counted as a quorum in the shareholders' meeting and will not be entitled to vote or dividends.
Benefits of Share Repurchase
Company
 | Increase stock demand, which may lead to a share price increase |
| Reduce the number of shares on the market, resulting in higher earnings per share |
| Can use it as an effective tool to manage excess liquidity |
| Capitalize on a capital gain if the company is confident in its future performance and believes that its share price is significantly lower than its fundamental value, reselling shares at the right time will generate profitable returns, with the capital gain recorded in the shareholders' equity as a premium on treasury shares |
Shareholders
 | Earnings per share (EPS) and Return on Equity (ROE) are higher because repurchased shares are not factored into the EPS calculation |
| Have opportunities of receiving a higher dividend per share |
| There is also a possibility that the share price will rise due to the higher earnings per share |
Public Limited Companies Act contains provisions which allow a company to own its own shares in 2 cases, namely:
 | In case the shareholders vote against the resolution of shareholders’ meeting to amend the company’s articles of association in the matters related to voting rights or rights to receive dividends; and | |
 | For the purpose of financial management when the company has accumulated profit and excess liquidity. | |
Qualifications of the listed company eligible for share repurchase - Share repurchase is permitted under the articles of association of the company:
- If the repurchase of shares ≤ 10% of the paid-up capital, the board of directors may be granted the power to determine the repurchase of shares.
- If the repurchase of shares >10% of the paid-up capital, approval from the shareholders’ meeting must be obtained and the shares must be repurchased within 1 year.
Additionally, a listed company who will repurchase shares for the purpose of financial management shall also have the following qualifications:
- have accumulated profit on the separate financial statement: the repurchase limit shall not exceed the company’s unappropriated accumulated profit which shall be reserved until the repurchased shares are wholly distributed or upon the decrease of capital to deduct the remaining repurchased shares after the distribution;
- have excess liquidity: considering from the ability to repay the debts within the next 6 months from the date of the share repurchase commencement date and the share repurchase does not affect the company’s ability to repay debts; and
- the free float proportion must not be reduced to lower than the minimum threshold stipulated by SET i.e. not lower than 15% of the paid-up capital. If there are less than 150 minority shareholders, the shares cannot be repurchased.
Share repurchase methods The method for share repurchase in each case is as follows:
| 1 | In case of share repurchase in case the shareholders vote against the resolution of shareholders’ meeting to amend the company’s articles of association in the matters related to voting rights or rights to receive dividends: the company shall adopt General Offer method (General Offer : GO). | ||||||||||||
| 2 | There are 2 methods in case of share repurchase for the purpose of financial management:
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Purchase price of the repurchased share or distributed repurchased share in SET - Repurchase price ≤ 115% of the average close price of the previous 5 trading days
- Distribution price ≥ 85% of the average close price of the previous 5 trading days
Information Memorandum which must be disclosed| 1. | Upon the passing of board of directors’ resolution on the share repurchase on Day T |
| In case the shareholders vote against the resolution | In case of financial management |
1. Period where the resolution must be disclosed
| 1. Period where the resolution must be disclosed
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2. Information that must be disclosed (Form TS-1.1)
| 2. Information that must be disclosed (Form TS-1.2)
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- listed company shall disclose the share repurchase project or distribution of repurchased shares 3 days before the commencement date of share repurchase / distribution of repurchased shares / the date the amendment or cancellation of the share repurchase project comes into effect. The disclosure must be done without delay on the date of the board of directors’ or shareholders’ resolution, as the case may be, and in case of amending or cancelling the project, the reason and necessity for such amendment or cancellation shall also be disclosed.
- For offer for share repurchase in case the shareholders vote against the resolution to amend the company’s articles of association in the matters related to voting rights / rights to receive dividends and the general offer for share repurchase for the purpose of financial management, the offer for share repurchase form shall be submitted to the shareholders and submitted via SETLink system to be disclosed to investors as follows:
- In case the shareholders vote against the resolution, offer for share repurchase form (Form TS-2.1) shall be submitted to the shareholders who vote against the resolution within 10 days from the date the period for notifying the offer has expired whereby the repurchase time period shall be 10 - 20 days.
- In case of general offer for share repurchase for the purpose of financial management, the offer for share repurchase form (Form TS-2.2) shall be submitted to the shareholders 10 days before the share repurchase commencement date whereby the repurchase time period shall not be less than 10 - 20 days.
| 2. | Report on the result of share repurchase |
| In case the shareholders vote against the resolution and in case of general offer | In case of share repurchase via SET |
1. Period of disclosure
| 1. Period of disclosure
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2. Information that must be disclosed (Form TS-3.1)
| 2. Information that must be disclosed (Form TS-3.2)
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| 3. | Upon the passing of board of directors’ resolution on the distribution of repurchased shares on Day T |
| In every case |
1. Period of disclosure
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2. Information that must be disclosed (Form TS-7)
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In case distribution of repurchased shares via RO: To proceed the same as in the case of Right Offering for newly issued shares i.e. the listed company shall disclose the date for share subscription to the existing shareholders not less than 14 days in advance including sending notice of rights >5 business days in advance and stipulate period for subscription > 5 business days etc.
| 4. | Report on the result of distribution of repurchased shares |
| In case of offer via PO, RO or ESOP | In case of distribution via SET |
1. Period of disclosure
| 1. eriod of disclosure
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2. Information that must be disclosed
| 2. Information that must be disclosed (Form TS-4)
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| 5. | Upon the passing of board of directors’ resolution on the deduction of the repurchased shares and capital decrease on day T |
| In every case |
1. Period of disclosure
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2. Information that must be disclosed (Form TS-5)
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| 6. | Upon the completion of capital decrease registration with the Ministry of Commerce by the company |
| In every case |
1. Information that must be disclosed (Form TS-6) within 3 business days after the capital decrease registration
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1. Procedures for Share Repurchase In case the Shareholders vote against the Resolution of the Shareholders' Meeting
2. Procedures for Share Repurchase for Financial Management
| Note : | - In case of the amendment to or cancellation of the share repurchase, the listed company shall disclose the information ≥ 3 days in advance prior to the date the amendment becomes effective. - AOM (Automatic Order Matching) is a purchase method by means of automatic matching via the trading system of SET |
3. Procedures for the Distribution of Repurchased Shares
| Note : | - In case of amendment to the repurchased share distribution method, the listed company shall disclose the information ≥ 3 days in advance prior to the date the amendment becomes effective. The offer for sale by via ESOP and PO methods shall be in accordance with the rules of the Office of the SEC. |
Related regulations
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Forms
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No, the shares repurchased by the company are not counted as a quorum for the shareholders’ meeting and do not have any voting right.
No. because the company must have excess liquidity and the share repurchase must not cause the company to experience financial issue. This shall be considered from the ability to repay the debts which will fall due within the next 6 months from the date of the commencement of share repurchase. The company’s need to take out a loan means that it does not have liquidity. In addition, the company must appropriate accumulated profit as a reserve in an amount equaling to the amount spent in the share repurchase until the repurchased shares are wholly distributed.
Yes, in case of the repurchase of shares in each project in an amount exceeding 10% of the paid-up capital, shareholders’ approval must be obtained and the shares must be repurchased within 1 year.
The company must have provisions on share repurchase in its Articles of Association in case the company’s intention is to grant the board of directors the power to approve the repurchase of shares in an amount not exceeding 10% of the total shares sold (Clause 6/1 of the Ministerial Regulation). However, in case the company wishes the shareholders’ meeting to approve the share repurchase for every project, the company is not required to amend its Articles of Association to contain provisions on share repurchase.
Approval must be requested from the board of directors again because the resolution of the board of directors shall be deemed not to comply with the Ministerial Regulation. The approval from the board of directors must be requested and the information memorandum must be disclosed via the system of the stock exchange again.
This depends on the request for approval of a particular share repurchase project. If the share repurchase project has been approved by the board of directors, the amendment or cancellation of the project may also be effected through the board of directors’ resolution.
Not always. If the company has disclosed the method for the distribution of repurchased shares and stipulated the time period for such distribution, the company may distribute the repurchased shares pursuant to the information disclosed.
Nonetheless, in case the company wishes to amend the method for the distribution of repurchased shares or stipulate time period for the distribution of repurchased shares, it may do so depending on the request for approval for such particular share repurchase project. If the share repurchase project is approved by the board of directors, the amendment to the method for the distribution of repurchased shares or the stipulation of the time period for the distribution of repurchased shares may be effected through the board of directors’ resolution whereby such information on the amendment shall be disclosed to the public. Moreover, the Office of the Securities and Exchange Commission has also stipulated additional criteria for the company to comply with the rules of the Office of the Securities and Exchange Commission.
Nonetheless, in case the company wishes to amend the method for the distribution of repurchased shares or stipulate time period for the distribution of repurchased shares, it may do so depending on the request for approval for such particular share repurchase project. If the share repurchase project is approved by the board of directors, the amendment to the method for the distribution of repurchased shares or the stipulation of the time period for the distribution of repurchased shares may be effected through the board of directors’ resolution whereby such information on the amendment shall be disclosed to the public. Moreover, the Office of the Securities and Exchange Commission has also stipulated additional criteria for the company to comply with the rules of the Office of the Securities and Exchange Commission.
No, because the intention of the Ministerial Regulation on share repurchase is merely to provide options and hence both share repurchase methods cannot be chosen simultaneously.
There is no prohibition. The board of directors should consider the appropriateness and best interest of the company. For each repurchased share distribution method, the company must comply fully with the relevant rules including procedures, stipulation of offer price and disclosure of information.
Yes.
The Public Limited Companies Act B.E. 2535 (1992) prescribes criteria for the sale of shares at a price lower than the share value only in case of newly issued shares. However, in this case, the shares repurchased by the company are not newly issued shares.
For the criteria for the stipulation of price, the company shall explain the rules or methods used by it to stipulate the price at which it will repurchase the shares such as book value (BV), market price, without specifying the price in figure or price range such as P/BV or P/E being X times lower etc.
The company must deduct the repurchased shares and register the capital decrease with the Department of Business Development, Ministry of Commerce.
The company must complete the sale offer within ½ years. If such time period is exceeded, the company must decrease its capital by deducting the remaining shares.
The date all the shares are repurchased, the date the time period for the latest share repurchase comes to an end or the date the cancellation of the share repurchase project comes into effect, whichever is earlier.
The company may cancel the share repurchase project only in case the company is not yet the owner of the repurchased shares in the project to be cancelled.
Nonetheless, in case the company has become the owner of certain portion of the repurchased shares and there exists necessity which prevents the company from repurchasing the remaining portion of the shares, the company may amend the share repurchase project by reducing the number of repurchased shares in accordance with the remaining portion of the shares which have not been repurchased. As for the portion of the shares which have been repurchased by the company, the company must proceed with the share repurchase project as announced until the end of the project..
Nonetheless, in case the company has become the owner of certain portion of the repurchased shares and there exists necessity which prevents the company from repurchasing the remaining portion of the shares, the company may amend the share repurchase project by reducing the number of repurchased shares in accordance with the remaining portion of the shares which have not been repurchased. As for the portion of the shares which have been repurchased by the company, the company must proceed with the share repurchase project as announced until the end of the project..
The purpose of the share repurchase project is to manage the company’s liquidity and not to effect capital decrease. Because the law provides a time period of up to 3 years, the company should try to sell all the repurchased shares as disclosed in accordance with the share repurchase project, which already stipulates the time period for the distribution of repurchased shares. In case the company is unable to distribute all the repurchased shares within the time period stipulated, it can then proceed to deduct the repurchased shares and decrease its capital accordingly.
If the time period for the distribution of repurchased shares stipulated for the project has expired and there are still repurchased shares remaining, the company can deduct the repurchased shares and decrease its capital before the expiration of the 3-year period.
The company can commence the new share repurchase project after the expiration of 6 months from the date the latest share repurchase project comes to an end.
The company may adopt the resolution of the shareholders’ meeting for capital increase and register the change to the registered capital with the registrar. However, the company cannot distribute additional shares to any person until all the repurchased shares are completely distributed or deducted.
The company may adopt the resolution of the shareholders’ meeting for capital increase and register the change to the registered capital with the registrar. However, the company cannot issue stock dividend until all the repurchased shares are completely distributed or deducted.
In this regard, the payment of dividend must be done within 1 month from the date the shareholders’ meeting or the board of directors’ meeting passes the resolution pursuant to Section 115 of the Public Limited Companies Act B.E. 2535 (1992).
In this regard, the payment of dividend must be done within 1 month from the date the shareholders’ meeting or the board of directors’ meeting passes the resolution pursuant to Section 115 of the Public Limited Companies Act B.E. 2535 (1992).
The number of shares excluding the number of the repurchased shares shall be used.
The number of shares issued and called to be paid up shall be used until the expiration of the time period for the sale of repurchased shares and until capital decrease.
No.
Such is deemed as remuneration to directors whereby the company must comply with the rules of the Office of the Securities and Exchange Commission in offering for sale repurchased shares to the company’s directors or personnel pursuant to the laws on securities and exchange.
They have the duty to report pursuant to the relevant criteria of the Securities and Exchange Commission.
They have the duty to report pursuant to the relevant criteria of the Securities and Exchange Commission.
Listed companies are not required to make the report pursuant to the form 246-2 since Section 246 of the Securities and Exchange Act does not apply to share repurchase and sale of repurchased shares of the securities issuers.
Listed companies can offer to purchase or sell repurchased shares via automated order matching (AOM) during the trading session.
Listed companies shall disclose the project for the share repurchase or distribution of repurchased shares 3 days in advance before the date of the commencement of share repurchase / distribution of repurchased shares / the date the amendment to or the cancellation of the project comes into effect whereby disclosure shall be made without delay on the date of the resolution of the board of directors or shareholders, as the case may be. In case of amendment to or cancellation of the project, reason and necessity shall also be provided in conjunction therewith.
The same procedures governing the offer for sale of capital increase shares in the form of RO shall be followed i.e. the listed company must disclose the date of the conferral of rights on existing shareholders to subscribe to the shares at least 14 days in advance, send out notice informing of such rights in advance and stipulate the time period for subscription etc.
The Office of the Securities and Exchange Commission prescribes that offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange at a low price or which constitutes concentration must be approved by the shareholders’ meeting.
As for offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange at the market price and which does not constitute concentration, the company’s board of directors can consider the allocation of the shares without requesting for approval from the shareholders’ meeting.
Therefore, when the board of directors or the shareholders’ meeting passes the resolution for offer for sale to be made to the company’s directors or personnel pursuant to the laws on securities and exchange, the resolution of the board of directors or the shareholders’ meeting (as the case may be) must be notified to the stock exchange immediately whereby disclosure must be made at least 3 days in advance before the offer for sale of repurchased shares.
As for offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange at the market price and which does not constitute concentration, the company’s board of directors can consider the allocation of the shares without requesting for approval from the shareholders’ meeting.
Therefore, when the board of directors or the shareholders’ meeting passes the resolution for offer for sale to be made to the company’s directors or personnel pursuant to the laws on securities and exchange, the resolution of the board of directors or the shareholders’ meeting (as the case may be) must be notified to the stock exchange immediately whereby disclosure must be made at least 3 days in advance before the offer for sale of repurchased shares.
- In case of sale in the SET, the information shall be disclosed before the trading session on the following business day.
- In case of RO / PO / offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange, the information shall be disclosed within 5 business days from the date all the repurchased shares are distributed whereby the result of the sale shall be reported to the Office of the Securities and Exchange Commission within the following time period:
- In case of offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange, within 15 days from the date of closure of the offer for sale.
- In case of PO, within 45 days from the date of closure of the offer for sale.
PO and RO: Disclosure can be made as a price range whereby before the date of the offer for sale the price must be clearly stipulated so that the shareholders have sufficient and complete information to support their decision-making. In the case of RO, the listed company must clearly disclose the price and ratio before the date of the posting of the sign to determine the names of persons with the rights to subscribe to the repurchased shares (XB sign) via the SETLink system for dissemination to investors.
Offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange: The price must be clearly stipulated.
The stipulation of the price must comply with the relevant criteria, which are prescribed to be within the power of the shareholders or the board of directors, as the case may be, and the shares cannot be given for free regardless of the methods of distribution.
Offer for sale to the company’s directors or personnel pursuant to the laws on securities and exchange: The price must be clearly stipulated.
The stipulation of the price must comply with the relevant criteria, which are prescribed to be within the power of the shareholders or the board of directors, as the case may be, and the shares cannot be given for free regardless of the methods of distribution.
Yes. In this regard, the price must be the same as that for the subscription which does not exceeding their rights and the company must first allocate the shares to existing shareholders in accordance with shareholding proportion, and in case there are shares remaining the company will be able to allocate the shares to shareholders who make subscription in a manner exceeding their rights in accordance with such shareholders’ shareholding proportion.
Yes.
No.
1. The company is about to announce important information which may affect the price of its shares, the rights and benefits of the shareholders or investment decision such as before the dissemination of financial statements, before the declaration of dividends, there are facts that a takeover is imminent, unless the listed company considers and opines that the current share repurchase is undertaken by persons who do not know of the company’s inside information.
2. The share repurchase or sale of repurchased shares with a connected person.
3. Anti-takeover, unless approval is obtained from the shareholders.
2. The share repurchase or sale of repurchased shares with a connected person.
3. Anti-takeover, unless approval is obtained from the shareholders.
Yes. The company is prohibited from entering into a transaction where the company has the intention to conduct the share repurchase or sell the repurchased shares in the stock exchange from a connected person. Nonetheless, the sale of the repurchased shares by means of offer for sale to the company’s directors or personnel shall comply with the relevant criteria of the Office of the Securities and Exchange Commission.
For projects in which the listed companies have already conducted share repurchase but have not yet distributed such repurchased shares on the date the Ministerial Regulation (No. 2) comes into effect
Yes, by complying with the criteria prescribed in the Ministerial Regulation. As for the cancellation of the project, such shall be in accordance with the criteria specified in Clause 16 as well.
This can apply to existing share repurchase projects whereby the listed company must disclose the amendment at least 3 days before the date of the commencement of the share repurchase or distribution of the repurchased shares and must request for the resolution of the shareholders’ meeting or the board of directors’ meeting, as the case may be, in order to amend such time period.
The time period shall be counted according to the existing project, which will expire in the middle of 2023 pursuant to the 3-year period applicable to the existing project.