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• Public Companies and Fundraising

Introduction

The Team's experience allows us to advise clients on a broad range of matters in the field of Public Companies and Financial Promotions. Whether floating on AIM, involved in a takeover, an offer for subscription, rights issue or other financial promotion, the team has the expertise and resources to guide its clients through the process.

Work handled includes:

• Stock Exchange Regulations
  Regulation of public exchanges is intended to protect investors and consequentially protect the market and its participants. As a result, listed companies must adhere to stringent rules and regulations in order to maintain their listing on an exchange. These rules differ according to the particular exchange the Company is listed on and breaching the rules can have severe consequences (financial, public relations and criminal).

There are also various codes of practice in relation to corporate governance that a company must adhere to. Again, the level of adherence required differs in relation to the exchange the Company is listed on.

• Capital Raising and Placings

Listed Companies
One method of raising finance for a company is selling shares and other financial securities in the primary market (for which a Company must strictly comply with, among others, Exchange Rules/Regulations). Securities are offered to the sponsors or brokers private clients and/or a narrow group of investors. The public stock exchanges provide access both to variety of investors and a market on which the shares can be traded (in the secondary market).

All companies
A further way of raising finance, is to offer shares to the public without listing the shares on a stock exchange. Such offers are tightly controlled by the Financial Promotion regime which aims to protect investors and prevent misleading information in any promotional material by regulating any communications, invitations or inducements to a third party to take part in certain investment activities (selling shares being one of such an activities).

• New listings on PLUS (formerly Ofex) and AIM
  PLUS and AIM are both cash equity exchanges aimed at small-mid cap companies. AIM, established by the London Stock Exchange, is a second tier or junior market which meets the needs of those companies who do not wish to adhere to the full strict rules (and resultant expense) of the main market. PLUS, an independent public market, similarly allows its members to publicly trade in securities of companies which are not necessarily listed on AIM or the main market.

In order to sell shares on a market the Company must formally apply for listing of the Company's shares on the exchange. There are differing levels of disclosure required depending on the exchange a Company chooses to list on. This is generally done through the admission document and the whole listing process can be lengthy.

• Takeover Code
  A Takeover for this purpose refers to the acquisition of a public company (or control in a public company) whose shares are listed on a stock exchange. The Takeover Code is the non-statutory rules laid down by the Takeover Panel which guides the conduct of participants in the takeover process.

• Underwriting
  To underwrite a new issue of shares or a new placing of shares by a Company is to guarantee that the shares will raise a specific amount of cash. Underwriters will undertake to subscribe for any of the issue not taken up by the public on a new listing or placing. These can be complex arrangements which provide comfort to the Company that the requisite cash from a new listing or placing of shares will be raised.

Recent work undertaken includes: 

• GMO Limited (AIM) – Admission to AIM by way of a placing of shares.
• China Education Group (Ofex) – Application for admission to Ofex and fund raising by issue of convertible loan notes.
• Europasia Education plc (AIM) – Advice on AIM rules and Corporate Governance.
• Sprue Aegis plc (Ofex) – Listing and offer for subscription
• Pittards plc (AIM) – Divesture of raw materials division, circular to shareholders in relation to market purchases of its own shares.
• MILS Technology (Ofex) – Offer for subscription
• e-Media-c plc (Ofex) – Offer for subscription