Prakas on Public Offering of Equity Securities of Holding Company

On 20 January 2025, the Non-Bank Financial Services Authority (“NBFSA“) issued Prakas No. 003 NBFSA/PrK on the Public Offering of Equity Securities of Holding Company (“Prakas“). The Prakas establishes the requirements and procedure for the public offering of equity securities by a holding company as well as its obligations following the offering.

In addition to the requirements as set out in the existing Prakas No. 005/15 SERC/PrK dated 10 September 2015 on the Public Offering of Equity Securities, this new Prakas provides for additional requirements applicable to holding companies which intend to conduct public offering of its equity securities in Cambodia (“Listing Hold Co“).

In this Update, we highlight some of the key features of the Prakas.

1. Additional Requirements for the Listing Hold Co

The Prakas sets out the following additional requirements for the Listing Hold Co seeking to conduct public offering of its equity securities:

• The principal business objective of the Listing Hold Co shall be the holding of shares in other companies.
• The Listing Hold Co shall have at least one principal operating company which has at least one principal business activity.
• The total assets of all principal operating companies under the Listing Hold Co shall not be less than 75% of the asset of the Listing Hold Co AND the total assets of the principal operating subsidiary or mixed (public-private) subsidiary shall not be less than 25% of the assets of the Listing Hold Co (the assets of the operating subsidiary and the mixed (public-private) subsidiary shall not be consolidated).
• The business operation of the Listing Hold Co shall not be that of a fund management company (in the event the Listing Hold Co is investing in a fund management company, the size of the investment shall not exceed 25% of the total assets of the Listing Hold Co).
• The Listing Hold Co shall have at least one director with Cambodian nationality residing in the Kingdom of Cambodia.
• The Listing Hold Co shall have independent director(s) with the required qualifications with no direct or indirect relationship with the Listing Hold Co and/or the principal operating companies.
• The Listing Hold Co shall have a proper controlling mechanism over the business operations of the principal operating companies.

2. Principal Operating Company of Listing Hold Co

The Prakas further sets out the following requirements of the principal operating company of the Listing Hold Co:

• A Principal Operating Company can be:
  • A subsidiary of the Listing Hold Co;
  • A subsidiary of the mixed (public-private) company (in such case, the Listing Hold Co shall hold at least 40% of the total shares with voting rights of the subsidiary); or
  • An associate company of the Listing Hold Co fulfilling any one of the following criteria:
    • Company having shares held by the Listing Hold Co of at least 25% but not exceeding 50% of the total shares with voting rights;
    • Company having shares held by the Listing Hold Co of between 20% to 15% of the total shares with voting rights and with rights to participate in decision making on important matters of such associate company; or
    • Company having shares held by the Listing Hold Co in excess of 25% of the total shares with voting rights after the proposed public offering of shares has been approved. 

• A Principal Operating Company shall fulfil the following conditions:
  • Not a publicly listed company in any securities market whether inside or outside of Cambodia;
  • Two years historical financial statements or consolidated financial statements for the proposed listing on the Main Board, or one year historical financial statements or consolidated financial statements for the proposed listing on the Growth Board; and
  • Proper corporate governance structure.

• In the event that the Principal Operating Company is a foreign entity, such Principal Operating Company shall:
  • Have at least one director with Cambodian nationality and residing in the Kingdom of Cambodia; and
  • Prove that the foreign laws and regulations governing such foreign Principal Operating Company provide sufficient investor protection.

Further important details of the obligations and requirements for the proposed public offering and following the offering are specified in the Prakas.

If you have any queries on the above, please feel free to contact our team members who will be happy to assist.