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The AIM flotation
process should take around 3 months, depending on the complexity of
the prospective AIM company’s business and the time the management team
are prepared to spend on the admission process.
The sequential
steps in the admission process are as follows:
Develop a Business
Plan
The directors / management team should prepare a business plan
that contains all relevant management, financial and business information
on the company, including future prospects, predictions and strategy.
Meet
Potential Nominated Advisers ("NOMADs") and Brokers
A series of presentations should be made to appropriate potential
NOMADs and nominated brokers to see if they are interested in the
business case and are willing to take the company to AIM. The potential
NOMADs and nominated brokers should be asked to sign a confidentiality
agreement before reviewing the business plan and any other
related documents.
Select
Key Professional Advisers
Firms of solicitors and accountants should be appointed for
the flotation. As before, the potential advisers should be asked
to sign a confidentiality agreement.
Initial
Strategy Meeting
An initial strategy meeting should be held with all parties
present to agree the timetable to flotation, consider fundraising
(private placing or public offer), discuss potential investors,
professional advisers’ fees and warrants and the ultimate constitution
of the board of directors etc.
Instigate
Engagement Letters
Engagement letters should be sent to the company from all
its advisers i.e. its NOMAD and nominated broker, accountant, solicitor,
etc.
Circulate
List of Parties, List of Documents and draft Timetable
Administration documents should be circulated by the NOMAD asap.
Commence
Due Diligence
The NOMAD is required by the London Stock Exchange to conduct
its own due diligence on the company. The NOMAD will normally
require that a "Long Form" due diligence report on the
company is prepared by the accountants (and often lawyers) at as
early a stage as possible. The NOMAD will also conduct checks on
the prospective directors’ business history to check that the director
is suitable by conducting checks with Securities and Futures Authority
and asking the directors to complete and sign a directors’ questionnaire
and declaration, detailing their business history and personal circumstances
(where relevant).
Circulate
First Draft Prospectus
The NOMAD will circulate a first discussion draft of the prospectus
to all parties asap.
Set all parties meeting
A meeting should be held to consider any specific issues concerning
the Prospectus such as directors’ share options and participation
in the placing / offer (if any), adopting a senior employee share
option scheme, applying for VCT or EIS relief, if available, etc.
Appoint
Registrars, Printers, Financial PR and Solicitors to the NOMAD
The NOMAD should obtain fee quotes and advise the company as
to who should be appointed. As before engagement letters should
be sent to the company for signature.
Clear
pre-flotation issues
The company’s solicitors should incorporate the company or re-register
it as plc (if appropriate), consider whether new memorandum and
articles of association should be adopted and organise the share
capital.
Circulate
draft documents
First drafts of the following should be circulated:
- Placing Agreement
/ Sub-Underwriting Agreement (if any)
- Warrant Instrument
(if any)
- Nominated
Adviser Agreement
- Nominated
Broker Agreement
- Working Capital
Report
- Accountant’s
Long Form Report (if any)
- Accountant’s
Short Form Report
- Application
Form (if public offer)
- Placing Letter
(if private placing) or Sub-Underwriting Letter
- List of expenses
If
there is to be a fundraising arrange Institutional Marketing Programme
The following matters should be put in hand, primarily by
the nominated broker and the NOMAD
- preparation
of presentations to institutional investors
- arrangement
of institutional meetings
- follow up
calls to institutional presentations
- maintain schedule
of institutional presentations and update regularly for their
response and the finalisation of allocation of stock
- discuss and
agree commission levels
Set Drafting and
Progress Meetings
These should ideally be held regularly, with a fresh draft of the
prospectus and any other documents that have been amended being
circulated after the meeting to all parties.
Print
Pathfinder Prospectus
After a couple of redrafts of the Prospectus, the NOMAD will
deliver the prospectus to the printers to prepare a "pathfinder"
prospectus. This is a draft prospectus which, whilst well developed,
is not yet quite in final form. A disclaimer of liability must be
included on the front page to make it clear that investors should
not place reliance on its contents, being subject to amendment.
Solicitors
Verification Process
The company’s solicitors have to complete the verification process,
whereby every statement in the prospectus is verified to be true,
by the date of the "P" Proof meeting. The verification
notes prepared by the solicitors will then be approved and signed
off by the directors who take responsibility for the accuracy of
the statements in the prospectus.
"P"
Proof Meeting – All Parties
The directors and all parties are present to approve the Placing
Proof ("P Proof") of the prospectus.
Ten
Day Announcement
The NOMAD will notify the London Stock Exchange ten days before
the shares are scheduled to be admitted to AIM (and therefore the
market) of the details of the company and its admission to trading
on AIM.
Circulate
"P" Proof Prospectus and Placing Letters / Sub-Underwriting
Letters or Application Forms
The NOMAD will ensure after the "P" Proof meeting
that the prospectus is sent to the printers for proofing, which
is then distributed (with a disclaimer) to the company, advisers
and most importantly, potential investors. Investors can place reliance
on the contents of the "P" Proof, subject to minor amendments.
The placing letters or application forms are sent out with the "P"
Proofs.
Ideally,
"P" Proofs and placing letters / sub-underwriting letters
or application forms should be sent out at least 2 weeks prior to
the impact date. In practice, this often happens within the last
week before impact.
Receipt of Placing
Letters / Sub-Underwriting Letter or Application Forms
Placing letters or sub-underwriting letters should be received
by the NOMAD, completed and signed, at least a week before impact.
Application
Forms, if there is a public offer, should be returned to the company’s
Registrars before impact if possible.
Apply to Crest
If the company has decided to become CREST registered, to enable
shares to be held in uncertificated form, the company (through its
registrars) must formally apply to CRESTCo Limited in good time
– at least 2 weeks before shares start trading.
Financial
PR
The financial PR advisers and the NOMAD should advise the company
on the best way to let the market and potential investors know about
the company’s admission and organise the PR and press announcements,
usually in the week or two before admission.
Set
Completion Board Meeting
The day before the impact date, a meeting of the board of directors
should be held to approve all documentation, including the prospectus,
and authorising the NOMAD to bulk print the prospectus and apply
for the Company’s shares to be listed on AIM.
Impact
5 business days before the company’s shares are scheduled to
be admitted to AIM, the NOMAD will formally apply to the London
Stock Exchange for the shares to be admitted. An AIM fee is payable
in connection with the application. The final prospectuses should
be distributed to interested parties and displayed at the company’s
offices and usually the NOMAD’s offices as well.
Admission
to trading
The Stock Exchange will formally announce via its Regulatory
News System that the company’s shares are admitted to trading on
AIM and dealings will commence in the shares at 8am. Shareholders
who are CREST registered with have their CREST accounts credited
on this day.
Despatch
share certificates
Shareholders who are not CREST registered should receive their
definitive share certificate within one or two weeks of admission.
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