03 Jun 2020
Curious to find out how if delisting would also affect the Singapore stock market in any way?
When a firm like Breadtalk is delisted from an exchange (SGX), you are no longer be able to buy shares from them anymore. Since you are unable to buy shares from them, this also means that you cannot be an owner of Breadtalk. In addition, when Breadtalk is delisted from an exchange, they are no longer require to disclose any financial information to us.
Breadtalk is delisted because of an acquisition made by a company called BTG Holding. BTG bought 98% of Breadtalk's shares. In order to be listed in SGX, the public must own more than 10% of the company's shares. Otherwise, SGX may remove the firm from the official list.
Now, imagine you have always wanted to open a cafe. After doing the calculation, you realise you need $100,000 to set up a physical shop along Raffles Place. However, you have only $40,000 and you short of $60,000. As a result, you go to your parent and borrow the remaining $60,000 at 0% interest. After 5 years, your cafe business is so successful that you want to expand your business globally, and this will cost you $100 million. You are scratching your head because you are now thinking where to get such a huge amount of money from. This is where you decide to go public and raise $100 million from people like us. From our perspective, we are making an investment of your firm by buying your shares. In order to get listed in SGX, you will engage an investment banker to help you to do so. This process is called initial public offering or IPO, or in your term, "listing in SGX".
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