Share Repurchase under Thai Law

A public company may repurchase its own shares in one of the two scenarios below:

1. Repurchase from dissenting shareholders who have voted against a shareholders’ resolution approving an amendment to the Articles of Association in respect of voting rights or rights to receive dividends (“Repurchase from Dissenting Shareholders”); or
2. Repurchase for financial management purposes, when the company has accumulated profits and surplus liquidity, and the repurchase of shares will not cause financial difficulty to the company (“Repurchase for Financial Management Purposes”).

2.1 Method of Share Repurchase
Prior to a shareholders’ meeting approving an amendment to a company’s Articles of Association in respect of voting rights and rights to receive dividends, the company shall, in a written notice summoning such meeting, indicate that the shareholders who vote against a shareholders’ resolution may request the company to repurchase their shares. 

Within 10 days from the expiration of the period for the shareholders to notify the company of their intentions to sell shares (i.e. within five days from the resolution date), the company shall send to such shareholders the offers to repurchase the shares, which contain details of the share price, pricing method, date, time and place of the repurchase, repurchase procedure and repurchase offer period. The offering period for the repurchase in this case shall not be less than 10 days or more than 20 days from the expiration of the aforementioned period.

2.2 Pricing
The repurchase price for the same class of shares must be the same, provided that the book value and the market value shall be taken into account in the determination of the repurchase price.

2.3 Disclosure Requirements
The company is required to disclose to the public the following information in relation to the repurchase of shares, by posting an announcement at its head office and branches (if any) on the date of sending the offer for the repurchase of shares to its shareholders:

1. Date, time and place of the shareholders’ meeting, and the resolution thereof;
2. Details related to the shareholders and the number of shares held by the shareholders who vote against the shareholders’ resolution and declare their intentions in requesting the company to repurchase their shares;
3. Share price, pricing method, date, time and place of the repurchase, repurchase procedure and repurchase offer period;
4. Effect on the company and its shareholders as a result of the repurchase; and
5. Disposition procedure, timing of disposition or cancellation of the repurchased shares.

In the case where the company wishes to modify or cancel the repurchase of shares, the company shall disclose such modification including the reasons and necessities to the public at least seven days prior to the date on which such modification or cancellation will be effective.

3.1 Corporate Authorisation
A share repurchase of more than 10% of the total issued shares of a company requires shareholder approval passed by a simple majority vote. Any share repurchase of not more than 10% of the total issued shares requires only a board of directors’ approval if permitted by the Articles of Association of the company. This shall also apply to the modification and cancellation of the repurchase of shares.

In addition, a share repurchase of more than 10% of the total issued shares has to be made within one year from the date of shareholder approval of such share repurchase. 

3.2 General Requirements
For the purposes of financial management, a public company with accumulated profits and surplus liquidity may propose a repurchase scheme to its shareholders, provided that the repurchase will not cause financial difficulties to the company. According to the Council of State, the share repurchase amount must not exceed the accumulated profits of the company. In order to be able to establish surplus liquidity, the company must be able to demonstrate its ability to pay all outstanding debts due within the six-month period following the repurchase date. 

3.3 Documentation
The share repurchase scheme must contain at least the following information:

1. Details showing the company’s accumulated profits and ability to pay its outstanding debts due within the six-month period following the repurchase date;
2. Reasons for the repurchase;
3. Number of shares proposed to be repurchased, pricing method, repurchase procedure and repurchase offer period;
4. Effect on the company and its shareholders as a result of the repurchase; and
5. Disposition procedure, timing of disposition or cancellation of the repurchased shares.

The company cannot propose a new repurchase scheme within six months from the completion of the repurchase of shares, the end of the previous repurchase scheme or the date on which cancellation of the repurchase scheme becomes effective.

3.4 Methods of Share Repurchase

1. Not Exceeding 10% Share Repurchase
   In the case where the shares to be repurchased do not exceed 10% of the total issued shares, the company may repurchase either by:(i) automatic order matching through the trading system of the Stock Exchange of Thailand (the “SET”); or (ii) a general offering to all shareholders.
   
   A repurchase period for making purchase offers through the SET shall not be longer than six months.
   In the case of making a general offering to all shareholders, the company is required to deliver the offer document to its shareholders not less than 10 days before commencement of the repurchase period, which shall contain:(i) details of the repurchase scheme; (ii) number and repurchase price of the shares; (iii) timing and procedure for the repurchase and payment; and (iv) share allocation in the case of excess tender of shares. The offering period for the repurchase in this case shall not be less than 10 days or more than 20 days.
2. Exceeding 10% Share Repurchase
   If the shares to be repurchased exceed 10%, the repurchase can only be made through a general offering to all shareholders.

3.5 Pricing

1. Pricing for General Offering to Shareholders
   In the case of a share repurchase by way of a general offering to shareholders, the repurchase price for the same class of shares must be the same.
2. Pricing for Share Repurchase through the SET
   In the case of a share repurchase through the SET, the average share price for the 30-day period prior to the date on which the company discloses details of the repurchase scheme to the public or to the SET must be considered in the determination of the repurchase price. This average share price is required to be considered merely as guidance because the actual repurchase price offered may be higher or lower than the average price.
   
   Please note that a repurchase price may not be higher than 115% of the average closing price for the period of five business days prior to the repurchase date. The notifications of the SET also require that the resale price of the repurchased shares may not be less than 85% of the average closing price for the period of five business days prior to the resale date.

Repurchased shares will not be counted for the purpose of a quorum at any shareholders’ meeting. In addition, during the period in which the company holds such repurchased shares, such shares will not have any voting rights nor any right to dividends.

The above restrictions cease to apply to repurchased shares once they have been disposed of by the company to a third party.

The company may resell the repurchased shares by automatic order matching through the trading system of the SET, a right offering, an employee stock option programme or by a follow-on public offering, provided that the resale cannot be performed earlier than three months after completion of the repurchase.

The repurchased shares, which are not sold by the company within three years from the completion of the repurchase or such shorter period as may be specified by the company in the share repurchase scheme, shall be cancelled by operation of law and the company’s share capital shall be reduced by its share par value. Within 14 days from the date on which the unsold shares have been cancelled, the company must register the capital reduction with the Ministry of Commerce. The company is required to disclose the cancellation of shares by posting an announcement at its head office and branches (if any) or, if listed, by complying with the applicable SET disclosure requirements.

In addition to the above, in relation to shares repurchased or disposed through the SET, a listed company will also have to comply with the requirements of the SET’s notifications.

For instance, neither a share repurchase nor a disposition of repurchased shares may be undertaken if a listed company is as follows:

1. The company is about to make or is in the process of making a disclosure of information which may have an effect on the rights and interests of the shareholders, a decision to invest or on the share price, unless such listed company has first complied with the general disclosure requirements of the SET;
2. The company is aware that the share repurchase or disposition of repurchased shares will be carried out with connected persons; and
3. The company is in the process of being taken over, is the subject of a tender offer or is believed likely to be subject of a take-over or tender offer, unless the listed company demonstrates that the share repurchase or the disposition of repurchased shares is not intended to avoid the take-over or tender offer, or has been approved by shareholders.

Furthermore, a share repurchase may not be made if it will result in the aggregate shareholding ratio of a listed company falling below the minimum free-floating requirement of the SET. 

It is important to note that the abovementioned specific requirements of the SET only apply to the repurchase and disposition of shares through the SET, and do not apply to the repurchase and disposition by a general offering to the public. 

On the day upon which:(i) a share repurchase resolution is passed by the board of directors or a shareholders’ meeting (as the case may be); or (ii) a disposition of repurchased shares is approved by the board of directors, a listed company must disclose certain information (e.g. information on accumulated profits, surplus liquidity, reasons for the repurchase and likely impact on the shareholders in the case of the repurchase for financial management purposes) to the SET. Where same day disclosure is impossible, disclosure may be made on the subsequent business day, at least one hour before trading. 

At least three days prior to any repurchase or disposition of repurchased shares, a listed company must disclose specified information to the SET on the repurchase and in the case of the proposed disposition, the date on which such disposition will take place or commence. In the case where the company wishes to modify or cancel the repurchase scheme, a listed company must disclose specified information to the SET at least three days prior to the date on which such modification or cancellation will be effective.

Upon each share repurchase or disposition of repurchased shares, a listed company must disclose the result thereof to the SET on the date of the share repurchase or disposition of repurchased shares or, where same day disclosure is impossible, at least one hour before trading on the subsequent business day if the repurchase or disposition is carried out on the SET; or within five business days from the date of the share repurchase or disposition if carried out by an offer to the public, a right offering or an employee stock option programme.

*Section 66/1 was added to the PLCA by the Public Limited Companies Act (No.2) B.E. 2544 (2001), which came into force on 4 July 2001. Pursuant to this Section 66/1, the Ministry of Commerce issued a Ministerial Regulation dated 23 November 2001 as amended by a Ministerial Regulation (No.2) dated 27 March 2022 (the “MOC Ministerial Regulation”), describing the repurchase procedures and requirements in detail.