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Flotations Notes

LPC Law Notes > Public Companies and Equity Finance Notes

This is an extract of our Flotations document, which we sell as part of our Public Companies and Equity Finance Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.

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1. Flotations - Preparation for listing a. Advantages and disadvantages of listing Advantages

1. Access to capital to fund growth and or reduce debt

2. Providing a market

3. Public profile Disadvantages

1. Burden of disclosure and reporting requirements

2. Management time

3. Changes to the board

4. Cost and fees

5. Loss of Control b. AIM v Market Advantages of AIM

1. LR apply only to companies listed on the Official List and do NOT apply to companies on AIM

2. Besides DTR 5, DTRs DO NOT apply to Aim companies because AIM not a regulated market

3. AIM companies may find it easier to fall within exemption from requirements to produce full prospectus under the PR. (NB: if no exemption available for s 85(1) FSMA AIM company will still need to produce a full FCA approved prospectus)

4. AIM rules less onerous than LPDT Rules Advantages of Main Market

1. More money, more investors interested

2. Prestige, greater profile, greater publicity (of course flipside, muss more regulation and disclosure requirement).

3. Exposure to analyst coverage, investor confidence (and remember that the main investors are professionals so for them the work of analysts is very important.)

4. Access to LSE only main market.

5. Since main investors are institutional, they will tend to be roaming around on the main market, this is an advantage.

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