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ADELAIDE
AUCKLAND
BEIJING
BRISBANE
CANBERRA
DARWIN
GOLD COAST
HONG KONG
LONDON
MELBOURNE
PERTH
SHANGHAI
SYDNEY
ULAANBAATAR
www.minterellison.com
WELLINGTON
What you need to know
AIM admission
2 MINTER ELLISON – AIM Admission – What You Need to Know
Coming to AIM – the main issues 3
AIM admission timetable 6
Supporting you through the process 7
A commercial approach and an experienced team 7
Working with other advisers 7
Comparison of AIM against the LSE’s Standard and Premium Listing Regimes 9
Our AIM listings experience 10
Our Asia Pacific capital markets experience 10
Our team 11
Our team continued 12
AIM Admission – What You Need to Know – MINTER ELLISON 3
Coming to AIM – the main issues
Careful preparation and identifying potential issues at an early Again, we recommend focussing on advisers with experience
stage is crucial to a successful international AIM admission. in international listings and the specific industry sector. We
can recommend suitable advisers and advise on their terms
To assist with the planning process, the following draws
of engagement.
on our experience in advising AIM companies in the Asia
Pacific region and highlights a number of key issues of which
prospective AIM companies should be aware. The directors
The directors are the most important people in the AIM
Prepare an AIM focused business plan admission process. It is the directors who provide the
information to the NOMAD so that it can determine if the
Companies planning to come to AIM should prepare a
company is suitable for admission. The directors are also
detailed and robust business plan for briefing and obtaining
central to the preparation of the admission document, and
interest from potential AIM advisers. This may be in the
the related and essential verification process.
form of a short information memorandum setting out the
company’s core business, historical financial information and Companies should have a designated director or key manager
likely profit and growth forecasts. Crucially, it should also set who is able to commit full time to the AIM listing process
out the company’s international ambitions and why it would in order to manage the process effectively. Attempting to
be an attractive proposition for the London investment undertake the process part-time is likely to lead to delays
community. We can help you with this. and increased costs. The process will run more smoothly if all
parties are committed to it.
Choosing a suitable NOMAD Recruitment of directors should begin as soon as possible.
An AIM company’s relationship with its NOMAD is the most All directors should be engaged under service agreements.
crucial relationship both before and after admission to AIM. We can advise you on all employment aspects along with
The NOMAD, a licensed UK entity which will sign off to the LSE the implementation of any proposed employee share option
that the company is fit and proper to be admitted to AIM, will arrangements. You will also be expected to adopt appropriate
project manage the admission process and act as a conduit corporate governance requirements for the operation of the
between the London Stock Exchange and the AIM company. board and its committees and share trading policies.
Choosing a NOMAD should be the first major decision
undertaken by a prospective AIM company. Well in advance
Due diligence
of a proposed admission, we recommend discussing the Detailed legal and financial (including tax) due diligence will
business plan and prospects with a variety of NOMADs which need to be undertaken as part of the AIM admission process.
are experienced in the relevant industry sector and have a Prior to formal due diligence commencing, a certain level of
track record of floating international companies. Through our corporate ‘house keeping’ should be undertaken in order to
relationships, we would be happy to recommend a number of identify key areas of risk at an early stage and to ensure that all
potential NOMADs. material information is readily available and in a form which
key advisers will be able to review. The more preparatory work
Legal advice should always be taken before signing any terms
undertaken, the simpler the process will be and surprises for
of engagement with a NOMAD.
the advisers will be less likely.
Engaging other advisers Some NOMADs may require a preliminary legal or technical
report on key assets or aspects of the business (eg patents,
An AIM company will also need to engage a broker (which mining tenements, environmental surveys). Undertaking
may be the same firm as the NOMAD), legal advisers, such reports in advance of admission can be a useful way
reporting accountants, share registrars, public relations of flushing out key risk areas, making the admission due
consultants and other independent experts (such as patent diligence process an easier task.
attorneys and a ‘competent person’ for resource companies).
4 MINTER ELLISON – AIM Admission – What You Need to Know
Pre-admission restructuring Fast track applicants must also have audited accounts
published no more than nine months prior to admission.
Restructuring key aspects of the business or corporate
structure in advance of an AIM admission may help maximise
future AIM prospects (eg by simplifying the corporate or
How much will it cost?
share structure) or may need to be done in order to comply The cost of an AIM listing for an international company will
with AIM rules (eg re-registering as a public company). Doing depend on a number of factors. We’d be happy to discuss the
this in advance helps to remove added complexity from the likely costs with you in light of our up to date market knowledge.
AIM admission process.
Major contracts
All material contracts will be publicly disclosed and
summarised in the AIM admission document. Accordingly, any
confidentiality issues or related sensitivities with contracting
parties should be cleared well in advance and consents
obtained where relevant.
It is also worthwhile to consider how key customers and
suppliers will react to the company going public, especially
if certain key contracts underpin the value of the business. In
some instances, the AIM admission may trigger a change of
control condition in certain key contracts which will be easier
to deal with, both practically and legally, if such contracts are
identified well in advance of admission.
Mining assets
For companies in the mining or oil and gas sectors, all
material assets will need to be the subject of a Competent
Persons Report which will be publicly disclosed. This report
has to be less than six months old at the time of admission.
You should identify whether there are existing reports which
may be suitable in light of the AIM rules (on which we can
advise you) and, if not, you should start arranging for an
appropriate person to undertake the report.
Consider the fast track
Companies listed on the ASX for at least 18 months may
take advantage of the fast track admission route to AIM
which reduces the time and admission document content
requirements. Fast track applicants need only issue a ‘pre-
admission announcement’ which is essentially a short form
admission document. However, companies wishing to raise
capital as part of a fast track AIM admission should consult their
NOMAD and broker on disclosure requirements as investors
will often require comfort from equivalent disclosure to that
normally contained in an admission document.AIM Admission – What You Need to Know – MINTER ELLISON 5
AIM admission – checklist of basic requirements
• An AIM company must appoint and retain a NOMAD and broker at all times.
• With certain limited exceptions, securities admitted to trading on AIM must be free from restrictions
on transferability. This does not prevent certain shares being subject to contractually imposed
restrictions on dealing such as ‘lock-ins’.
• All securities of the same class must be admitted to trading on AIM.
• An AIM company must ensure that appropriate settlement arrangements for its securities are in
place and, in particular, AIM securities must be eligible for electronic settlement. Non UK companies’
securities are not recognised and a depository interest arrangement must be implemented.
• An AIM company must pay AIM fees in accordance with the LSE’s tariff.
• An applicant which is an ‘investing company’ (ie a company which has as its primary business the
investing of its funds in the securities of other companies or the acquisition of a particular business)
must comply with the ‘Note for Investing Companies’ and make it a condition of its admission that
it raises a minimum of £3 million in cash via an equity fundraising at the time of admission to AIM.
It must also state and follow an investing policy.
• An applicant which is a mining or oil and gas company must comply with the ‘Note for Mining
Oil and Gas Companies’, including the preparation of a Competent Person’s Report and specific
content requirements.
• No minimum shares need to be in public hands.
• There are no market capitalisation or trading record requirements.
• An admission document is required but is not pre-vetted by the LSE or the FSA unless the
offering involves an offer to the public and therefore requires a prospectus in accordance
with the Prospectus Rules.
• Historical financial information relating to the company and its subsidiaries must be included in the
admission document – usually audited accounts for the last three years, or a shorter period of time if
the company has been in existence for less than three years. If more than nine months have elapsed
since the company’s financial year end, interim financial information must also be included, which may
or may not be audited.
• A fast-track admission route is available for companies quoted on certain designated markets
(including the ASX and TSX) for at least 18 months prior to the admission date. Companies relying on
fast-track admission do not have to comply with the standard disclosure requirements.6 MINTER ELLISON – AIM Admission – What You Need to Know
AIM admission timetable
Timetable for the admission process (the admission process can take between three to six months)
Week
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Test marketing
Negotiation of agreements for the engagement of the
NOMAD and broker, reporting accountant and registrars
Review corporate structure with key advisers
Long form report produced
Accountants’ report produced
Working capital review
Drafting of AIM admission document
Senior executive employment arrangements and terms
of appointment of non-executive directors
Negotiation of placing agreement
Legal due diligence report produced
Verification
Pathfinder completion meeting
Marketing
Placing list finalised
Placing proof prepared
Placing proceeds received by broker
Completion meeting
Admission to AIM and dealings commence
Proceeds of the placing paid to companyAIM Admission – What You Need to Know – MINTER ELLISON 7 Supporting you through the process Minter Ellison’s London AIM team works together with the firm’s network of offices in the Asia Pacific region to create a seamless multi-jurisdictional team able to work on all aspects of an AIM admission and associated fundraising. We believe this is the most effective model for giving clients access to advisers on the ground in London and also throughout Australasia and Asia. We understand the work required for the successful completion of an AIM admission and we have the expertise and resources to perform the work efficiently and to the highest standard. We also have the necessary experience of the legal, regulatory, procedural and commercial issues likely to arise, both locally where the business is conducted and in the United Kingdom. We can find constructive solutions to resolve these issues. We are able to work with the company’s other advisers to produce, in a short timeframe, the necessary ‘core’ admission documents. These documents will be easy to understand and follow, and will be tailored to suit the company’s business and circumstances. They will be designed to ensure that the admission process runs efficiently from the outset. A commercial approach and an experienced team When advising on AIM admissions, we appoint a small core team to work on the transaction which will comprise dual qualified English and Australian lawyers in London and on the ground in the company’s jurisdiction. We can also call on a full range of specialist lawyers in Australia, New Zealand, Hong Kong and the People’s Republic of China where appropriate. To help keep costs down we use wherever possible, lawyers from the jurisdiction where the company operates to conduct the commercial and operational due diligence and verification procedures. Working with other advisers We’ve had dealings with a number of NOMADs on a variety of AIM transactions and, if required, we can arrange introductions particularly to those NOMADS who specialise in bringing international companies to AIM in specific industry sectors.
8 MINTER ELLISON – AIM Admission – What You Need to Know
Comparison of AIM against the LSE’s
Eligibility
Criteria AIM
No requirement but NOMAD required to assess suitability.
Free float
No requirement. However, the admission document should contain audited historical financial information
covering the last three financial years or such shorter period during which the issuer has been in operation,
Accounts and the audit report in respect of each year (paragraph 20.1, Prospectus Rules (PR), Annex I).
A statement is required by the issuer’s directors that, in their opinion, having made due and careful enquiry,
the working capital available to the issuer and its group will be sufficient for its present requirements; that
Working Capital is, for at least 12 months from the date of admission of its securities (paragraph (c), Schedule 2, AIM Rules).
No requirement but nominated adviser required to assess suitability.
Market Capitalisation
No requirement.
Trading record
No requirement.
Control of assets
No requirement.
Independent business
Unless London Stock Exchange plc agrees otherwise, AIM securities must be eligible for electronic
settlement (AIM Rule 36).
Electronic settlement
The issuer must appoint a nominated adviser (AIM Rule 1).
AdviserAIM Admission – What You Need to Know – MINTER ELLISON 9
Standard and Premium Listing Regimes
criteria
Standard Listing Premium Listing
25% minimum (Listing Rules (LR) 14.2.2R). 25% minimum (LR 6.1.19R).
No requirement. However, the prospectus should contain The issuer must have published or filed audited consolidated accounts
audited historical financial information covering the last covering the last three years ending no more than six months before
three financial years or such shorter period during which the date of the prospectus (LR 6.1.3R).
the issuer has been in operation, and the audit report in
respect of each year (paragraph 20.1, PR, Annex I).
A statement is required by the issuer that, in its opinion, The issuer must satisfy the Financial Services Authority that it and its
the working capital is sufficient for the issuer’s present subsidiary undertakings have sufficient working capital available for
requirements or, if not, how it proposes to provide the the group’s requirements for at least the next 12 months from the
additional working capital needed (paragraph 3.1, date of publication of the prospectus (LR 6.1.16R).
PR Annex III).
The expected aggregate market value of all securities The expected aggregate market value of all securities (excluding
(excluding treasury shares) to be listed must be at least treasury shares) to be listed must be at least £700,000 (LR 2.2.7R(1)).
£700,000 (LR 2.2.7R(1)).
No requirement. At least 75% of the issuer’s business must be supported by a historic
revenue earning record covering the period for which the audited
accounts are required (LR 6.1.4R).
No requirement. The issuer must control the majority of its assets and have done so for
at least the period for which the audited accounts are required
(LR 6.1.4R(2)).
No requirement. The issuer must carry on an independent business as its main activity
(LR 6.1.4R(3))
No requirement. However Rule 1.7 of the Admission and Securities must be eligible for electronic settlement (LR 6.1.23R).
Disclosure Standards of the London Stock Exchange plc
stipulates that securities admitted to its markets (excluding
AIM) must be eligible for electronic settlement.
No requirement. The issuer must appoint a sponsor (LR 8.2.1 R(1)).10 MINTER ELLISON – AIM Admission – What You Need to Know
Our AIM listings experience
We advised on the following AIM admissions (acting either for the company or for the NOMAD
and adviser):
• AIM Resources Limited (A$90M international fundraising)
• Blue Oar Securities plc and its Australian sister company, Inteq Limited, as NOMAD
and financial adviser
• Cash Converters International Ltd
• Dwyka Diamonds Limited
• Gravity Diamonds Limited (fast track AIM admission)
• Gympie Gold Limited
• Hertford Group plc
• Norwood Immunology Limited (AIM admission, initial and secondary UK and US fundraising)
• Phosphagenics Limited (fast track AIM admission, initial and secondary UK fundraising)
• Pursuit Dynamics plc
• XKO Group plc.
Our London office acted for RFC Corporate Finance, the first Australian NOMAD approved by the LSE, on
its appointment as a NOMAD.
We also act for Computershare Limited (in London and in Australia), the primary provider of depositary
interests for international companies seeking admission to AIM. As a result our London office has been
instructed by many of the major London law firms on CREST depositary interest trading arrangements for
numerous international AIM floats.
Our Asia Pacific capital markets experience
Minter Ellison teams have advised on numerous capital markets transactions in the Asia Pacific:
• Aevum Limited (A$74m IPO and ASX listing)
• Babcock & Brown Residential Land Fund (A$175m IPO and ASX listing)
• Dah Sing Bank (reverse takeover of Hong Kong Industrial and Commercial Bank Limited and its listing
on the Hong Kong Stock Exchange)
• Dah Sing Banking Group Limited (HK$2.4bn IPO)
• iShares, Barclay Global Investors’ exchange traded funds (A$130bn Australian launch and ASX listing)
• Macquarie Capital Alliance Group (A$1bn IPO and ASX listing)
• Peregrine International Holdings Limited (listing on the Hong Kong Stock Exchange)
• Tencents’ Limited (HK$1.8bn IPO and listing on the Hong Kong Stock Exchange).AIM Admission – What You Need to Know – MINTER ELLISON 11
Our team
Michael Whalley London Yi Yi Wu Shanghai
T +44 207 448 4801 T +86 21 6288 117
E michael.whalley@minterellison.com E yiyi.wu@minterellison.com
Michael has more than 30 years’ experience Yi Yi has over 20 years’ international,
in European-Australian cross-border Australian and Chinese experience,
transactions and capital markets including specialising in inbound and outbound
AIM. Michael also advises on foreign investment, IPOs and mergers and acquisitions, foreign direct investment, corporate
other fundraising activities, share and asset acquisitions and finance, employment and real estate. Yi Yi has advised on
disposals, restructurings and financing. capital raising, loan facilities, debt issues and IPOs, and has
cross-border expertise across a wide range of industries.
Michael Wallin London
T +44 207 448 4824 Nigel Clark Beijing
E michael.wallin@minterellison.com T +86 10 6535 3400
E nigel.clark@minterellison.com
Michael advises on a wide range of
corporate matters, including capital Nigel leads our Beijing office having
raising, cross border mergers, acquisitions previously worked in our Sydney and London
and disposals, private equity investments, joint ventures offices. He advises companies and financial
and venture capital work. Michael also advises on major institutions on their investments from Asia into Australia and
outsourcing transactions. Europe, and specialises in leveraged and acquisition finance.
Fred Kinmonth Hong Kong Lis Ellis Ulaanbaatar
T +85 22 841 6822 T +976 7012 7770
E fred.kinmonth@minterellison.com E elisabeth.ellis@minterellison.com
Fred is recognised as one of the leading Lis advises on capital markets, mergers
corporate advisers in Asia. He has over and acquisitions, and general corporate
35 years’ experience as a corporate and and regulatory matters. She has particular
transactional lawyer and as an investment banker. Fred expertise in structuring and negotiating major infrastructure
advises on IPOs, rights issues, share placements, mergers projects. With over 13 years’ experience in Asia, Lis is leading
and acquisitions and private equity investments. He also has our efforts in the rapidly emerging market of Mongolia.
extensive experience in equity fundraisings, refinancings
and restructurings. Costas Condoleon Sydney
T +61 2 9921 4694
Barbara Mok Hong Kong E costas.condoleon@minterellison.com
T +85 22 841 6803
Costas Condoleon is recognised as
E barbara.mok@minterellison.com
one of Australia’s leading corporate
Barbara is a leading lawyer in mergers and lawyers, specialising in M&A (negotiated,
acquisitions and capital markets. She has friendly and hostile), capital raisings, and
extensive experience in public/private corporate and securities law. Costas has led teams advising
company takeovers and cross-border investments. Barbara on transactions totalling over $75bn, including some of
advises on IPOs and secondary fundraisings, regulatory Australia’s most complex and novel transactions.
compliance, corporate governance, and a broad range of
commercial matters.Our team continued
James Hutton Sydney Andrew Thompson Perth
T +61 3 8608 2845 T +61 8 6189 7860
E james.hutton@minterellison.com E andrew.thompson@minterellison.com
James Hutton has over 17 years’ experience Andrew Thompson heads the Energy and
in equity, debt and hybrid capital markets. Resources Team at Minter Ellison Perth.
James has advised on the listing (via IPO or He practises principally commercial and
sell down) of various businesses entities on the ASX. He has corporate law with an emphasis on mining, energy and resources
completed numerous ASX listings, IPOs, private secondary transactions, major projects and infrastructure matters.
capital raisings.
Bruce Cowley Brisbane
Daniel Scotti Sydney T +61 7 3119 6213
T +61 2 9921 4360 E bruce.cowley@minterellison.com
E daniel.scotti@minterellison.com
Bruce Cowley is the Chairman of the
Daniel Scotti has significant experience Brisbane office of Minter Ellison and a senior
in all forms of equity and hybrid capital corporate lawyer with 30 years’ experience
raisings and mergers and acquisitions. advising Australia’s top public and private companies and
He acts for issuers and lead managers on IPOs, placements, government corporations.
rights issues and entitlement offers, other secondary offers,
secondary sales and convertible and corporate bond offers.
Daniel also advises on Corporations Act and ASX Listing Rule
compliance, reporting and disclosure obligations.
Don Clarke Melbourne
T +61 3 8608 2896
E don.clarke@minterellison.com
Don Clarke has advised on more than 100 ASX
listings, acting for the company or underwriter.
Don has also advised clients on AIM listings
and in undertaking ADR programmes in the USA.
Marcus Best Melbourne
T +61 3 8608 2946
E marcus.best@minterellison.com
Marcus has extensive expertise in equity
capital market transactions, successfully
completing numerous ASX listings, initial
public offerings and secondary capital
raisings and working on numerous transactions involving
companies admitted to listing or trading on the LSE and AIM.
Marcus has established strong relationships with leading
market participants, particularly in the mining, resources, and
financial services industries.
ULAANBAATAR
WELLINGTON
GOLD COAST
HONG KONG
MELBOURNE
AUCKLAND
CANBERRA
SHANGHAI
ADELAIDE
BRISBANE
LONDON
DARWIN
SYDNEY
SYD11 0132v10
BEIJING
PERTH
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