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LISTING ON AIM FOR GERMAN COMPANIES THE UK REQUIREMENTS

LISTING ON AIM FOR GERMAN COMPANIES THE UK REQUIREMENTS. Peter Hill and Jonathan Deverill Corporate Partners, Barlow Lyde & Gilbert 28 April 2005. LISTING ON AIM FOR GERMAN COMPANIES. Methods of joining AIM On-going obligations of AIM companies

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LISTING ON AIM FOR GERMAN COMPANIES THE UK REQUIREMENTS

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  1. LISTING ON AIM FOR GERMAN COMPANIESTHE UK REQUIREMENTS Peter Hill and Jonathan Deverill Corporate Partners, Barlow Lyde & Gilbert 28 April 2005

  2. LISTING ON AIM FOR GERMAN COMPANIES • Methods of joining AIM • On-going obligations of AIM companies • The Prospectus Directive – Implications for AIM companies

  3. JOINING AIM - METHODS • INDIRECT – merger with/acquisition by existing AIM company • DIRECT – company’s shares admitted to trading on AIM

  4. JOINING AIM – INDIRECT METHOD • Assume share for share transaction • Implications:- • merger with new organisation – “cash shells” • “reverse” (if 100%+) • obligation to bid for AIM company (if 30%+) – unless “whitewash” • admission document • tax • other issues – eg, minority “squeeze-out”

  5. Full List Minimum 25% shares in public hands Normally 3 year trading record required Prior shareholder approval required for substantial acquisitions and disposals Pre-vetting of admission documents by the UKLA Sponsors needed for certain transactions Minimum market capitalisation AIM No minimum shares to be in public hands No trading record requirement No prior shareholder approval for transactions* Admission documents not pre-vetted by Exchange or UKLA Nominated adviser required at all times No minimum market capitalisation *Not applicable to reverse takeovers JOINING AIM – DIRECT METHODADMISSION CRITERIA – MAIN DIFFERENCES BETWEEN FULL LIST AND AIM:-

  6. JOINING AIM – DIRECT METHOD • Two methods to list on AIM:- • standard route • fast-track route, if already quoted on certain overseas markets • For either method, company must:- • appoint a nominated adviser (“nomad”) • appoint a broker, who must be a member of the LSE • be “suitable” for AIM (eg, shares freely transferable)

  7. JOINING AIM – DIRECT METHOD • Standard route:- • admission document required (in English) • must include information about company’s business, financial position, directors, etc • advisers – lawyers, reporting accountants, PR company, in addition to nomad/broker • timing/costs

  8. JOINING AIM – DIRECT METHOD • Fast-track route:- • eligible if securities already traded for 18 months on “AIM designated market” • AIM designated market includes Deutsche Börse • no need for admission document – use accounts provided not more than 9 months old • detailed pre-admission announcement instead • Example – BKN International AG, November 2003

  9. JOINING AIM – DIRECT METHOD • Listing issues (whether standard or fast-track route): • working capital statement • lock-in requirement for new companies • financial statements – UK/US GAAP or IAS • verification/due diligence process • settlement of AIM securities

  10. ONGOING OBLIGATIONS OF AIM COMPANIES • relatively light regime, no quarterly reporting, no need for shareholder approval of transactions (unless “reverse”) • need nomad and broker at all times • obligation to keep investors informed/disclosure • half-yearly reports • other – share dealings

  11. THE PROSPECTUS DIRECTIVE – IMPLICATIONS FOR AIM COMPANIES • Prospectus Directive (2003/71/EC) • to harmonise the requirements within EU for drawing up, approving and distributing prospectuses • Prospectus Regulation ((EC) No 809/2004) specifies format, content and means of publication • being implemented into English law on 1 July 2005 • section 85, Financial Services and Markets Act 2000 (as amended)

  12. THE PROSPECTUS DIRECTIVE – IMPLICATIONS FOR AIM COMPANIES • When will a company have to publish a prospectus? • admission of securities to trading on a UK regulated market • “offer of securities to the public” in the UK • relevant to both IPOs and subsequent fundraisings • How does this affect AIM? • AIM is not a “regulated market” • issue is whether an “offer of securities to the public”

  13. THE PROSPECTUS DIRECTIVE – IMPLICATIONS FOR AIM COMPANIES • Is there an “offer of securities to the public” in the UK? • various exemptions, including: • qualified investors • less than 100 persons per EEA State • offer of less than €2.5m • if “yes” – prepare a prospectus – more detailed contents and process • if “no” – simpler “admission document” or “fast track” announcement

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