(AFP) Securities Commission today relaxed guidelines on fund raising in a sweeping move to hasten restructuring for troubled companies amid weak market conditions.

Some 91 listed companies were presently "very sick" and undergoing restructuring but strict regulations were hampering efforts to raise funds, said commission chairman Abdul Ali Kadir.

"We are running short of white knights... so we are lowering the height of the (knight) in these sort of things but we still want to make sure he passes the strength test," he told a press conference.

"He should still be able to carry the fair damsel away from the dragon."

Rules on shareholding spread, underwriting, reserves and capital structure for companies planning an initial public offering (IPO) and fund raising by troubled listed firms were eased with immediate effect.

The minimum 15 percent public shareholding level for IPO companies was removed and they can place out private securities as part of the scheme -- previously allowed only for those with paid-up capital of at least RM100 million.

More option

All listed companies can now enjoy flexibility on fund raising and restructuring, previously granted to only firms defined as "rescue cases", such as easier profit requirement for assets to be injected.

"There are also companies which are very sick but not in intensive care...they are not allowed to enjoy this medicine so they all suffer prolonged agony," said Abdul Ali.

"We hope they do not get into intensive care so we are now allowing this medicine to be dispensed to all those also in the general ward."

Abdul Ali said the move would give companies more options in structuring their corporate proposals.

"We hope they will recover as quickly as possible, that's why we need to ensure greater flexibility but without sacrificing too much quality and endangering the capital market," he added.