| Listing on the Alternative Investment Market
(AIM) of the London Stock Exchange |
| The most successful growth market in the world. Powering
the companies of tomorrow. Since its launch in 1995, over 2,900 companies
have chosen to join AIM. |
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| The Time is Right – Now! |
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| The Impact of Circular 75 |
On 21 October 2005 The People's Republic
of China State Administration of Foreign Exchange (SAFE) issued Circular
75 – “Circular on Relevant Issues of the Foreign Exchange Administration
for Overseas Financing and Round-Trip Investment by Domestic Residents
through Offshore Special Purposes Vehicles”.
Circular 75 replaced Circular 11 and Circular
29 that had effectively stalled Chinese Companies IPO on overseas stock
exchanges for nine months.
The most critical change in Circular 75 is that
SAFE now only requires Chinese residents to register with SAFE rather
than obtain SAFE approvals. To simplify the process and time factor,
this can be done at local SAFE branches rather than SAFE in Beijing.
Circular 75 provides a set of strict registration
procedures and reporting obligation. |
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| This clarification is significant to companies
in PRC that are actively seeking offshore equity financing. It should
boost the number of companies going to the main market and AIM in
London Stock Exchange. |
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| Attractiveness of AIM |
| In terms of IPO activities, Hong Kong still currently
ranks as number one for companies in Greater China. These activities will
continue and will be sustained by the following: |
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The continuation of privation of state
owned enterprises. |
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The solid growth of the private sectors. |
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This is reflected by a year-on-year steady capital
raising growth of 3% IPO for both the US (NASDAQ and NYSE) and European
markets (such as the London Stock Exchange).
A more proactive promotional approach by NASDAQ
and NYSE than that of the London Stock Exchange, coupled with a majority
of the advisors coming from Hong Kong and America has accounted for
a greater number of New York listings than in London by companies in
China.
In view of the Sarbanes-Oxley Act and the compliance
issues after listing, American Corporate and Securities Lawyers are
encouraging US firms to list in the Alterative Investment Market (AIM)
of the London Stock Exchange. This shows that the AIM market is warming
up in the international IPO arena. Companies in China should not let
this chance pass without capitalizing on it.
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| Benefits of Listing on AIM |
| The London Stock Exchange (LSE) operates two markets:
- Main Market and the Alternative Investment Market (AIM). |
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| Increase Growth Potential |
| By listing on one of the most liquid markets for raising
capital, companies in China not only can raise capital but also gain respectability
that can propel them to further growth. |
| Light Regulation |
| AIM is a lightly regulated stock market for smaller issues. |
| Shorter Listing Period |
| An initial public offering on AIM generally takes 3 to
4 months once applied rather than the typical 6 months for an IPO in the
United States. |
| Lower Cost |
| Raise capital at a lower cost. The initial fee paid to
the London Stock Exchange is approximately US$7,500, compared with NASDAQ
charges of some US$100,000 to $150,000. |
| Less Financial Reporting Burden |
| After the offering, AIM requires semi-annual rather than
quarterly financial reporting. |
| No Minimum Requirements |
| AIM has no requirements for minimum market capitalization,
shareholders’ equity, per-share bid price, earnings or trading volume
– well suited to companies in China. |
| Increase Visibility |
| Listing on AIM provides visibility to customers and suppliers
in Europe and companies in China are desperate to leverage the European
markets. |
| Flexibility |
| AIM is flexible, allowing for innovative transactions
that the US cannot. |
| Opportunity for Mature Companies |
| Mature private companies in China that cannot go public
in NASDAQ or NYSE may particularly benefit from a public offering on AIM. |
| Additional Benefits for Listed Companies |
| For those already listed in the Shenzhen or Shanghai
Stock exchange, both the main market and AIM of the London Stock Exchange
holds great attraction for further capital raising. For instance, dual
listing is the key to a better company reputation. |
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| Our Fast Track Route to AIM |
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| Ten Steps to Listing |
There are 10 steps to preparation which
can be expressed as management by objectives with re-engineering processes
and implementation activities. The following steps can be used for listing
on the London Stock Exchange.
Depending on how well structured and compliant
the organization is, the first 6 steps involve intense preparatory work
and usually takes around 6 to 15 months to complete. These 6 steps will
provide the platform for the remaining 4 steps, which have to be completed
within a 90-120 days period if the organization wishes to go public
at that time.
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| Each step is clearly identified by milestones, tasks
specifics and a timeline. In addition, there are regular reports to sign
off for each step. The project leader has the responsibilities to co-ordinate
different tasks and the timeline into a seamless process. |
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| Our IPO Teams |
| We have an integrated team to ensure the whole process
runs smoothly. |
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| The UK Team |
| Our United Kingdom team consists of experienced law firms
that have successfully taken a number of companies, both in the UK and
abroad to the listing markets. These law firms are nominated advisors
(or "Nomad") - a list provided by the London Stock Exchange.
They work with underwriters, banks and accountancy firms to make the IPO
process successful. The Nomad assists in preparing the AIM admission document
and determines whether the companies (issuers) are suitable for an AIM
listing. Names of firms in the UK will be disclosed to our clients. In
addition, a dedicated project leader from the UK will oversee activities
and milestones in the Far East. |
| The China Team |
| Our Greater China team consists of a well renowned tax
advisory firm from Hong Kong. Its experience in international tax and
Hong Kong and China tax regulations ensure that our clients will be well
advised in tax matters. Our team is also supported by a team of 200 strong
management consultants to make sure everything is in line with the requirements
of the listing rules. Names will be released to clients during our initial
meeting. |
| Initial Free Consultancy
Meeting |
| Explore the potential of listing on AIM. During this
initial free meeting we will: |
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Evaluate the suitability of your company
for listing. |
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Give you an opportunity to meet your dedicated
project leader. |
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Prepare a gap analysis report should you wish to
proceed. |
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