Why List on AIM?
Since its inception in 1995 over 2,400 companies have joined AIM, raising more than £30bn collectively. Today, AIM attracts a range of dynamic companies from venture capital-backed businesses to more established growing organisations. AIM is open to organisations from all sectors all over the world, although in recent times, oil, gas, and mining have been particularly popular.
Key benefits of listing on AIM
With a business day that begins before Tokyo closes and continues well into New York trading time, AIM’s London location offers a convenient time zone for many European, US Middle Eastern and Far Eastern companies to conduct business.
Simple admission process.
Less onerous regulatory requirements than the Official List, suited to smaller companies.
Creates access to a broad range of investors to raise finance for further growth.
Places a value on the business.
Tax incentives available for investments in AIM companies attractive to both individual and institutional investors.
Enhances the company’s public profile.
Gives shareholders the opportunity to realise all or part of the value of their shareholdings.
So just what is the attraction of AIM?
An AIM listing offers companies the ability to raise capital to fund future growth, both at the time of admission and later through further issues which could enable the company to broaden its investor base by attracting support from London’s deep pool of institutional investors. Listing on AIM can be an incredibly effective way to fund your company’s growth and development plan. AIM is especially well suited to small and medium-sized firms because it simplifies investor relations, providing access to a unique, globally-respected marketplace
There is no a minimum market capitalisation for a company to be admitted to AIM, but most companies tend to fall within the £25 million to £500 million bracket.
There is no minimum percentage of shares that must held in public hands, as is the case with the Full List of the London Stock Exchange. However, in practice, the AIM team may require 25% of shares to be held as a free float. This is a logical requirement as otherwise a company’s stock would not have sufficient liquidity to justify its public company status.
An AIM listing also enhances credibility and status with potential investors, and raises the company’s profile with global customers and suppliers. It can also boost employee motivation by creating opportunities for equity based incentive schemes and provide a liquid currency for growth (i.e. shares as consideration)
Another major advantage of AIM is flexibility. Financial statements need only be filed on a six-monthly basis, rather than quarterly, and companies listed on AIM are also entitled to a range of tax benefits.
It goes without saying that public life isn’t suitable for all companies. The AIM admission process requires commitment from the company and its management and there are a number of important points to consider from the outset.
Other considerations
Additional responsibilities and restrictions placed on directors. For example, they will only be permitted to buy and sell shares in the company at specific times.
Control of business: significant acquisitions and other such decisions may require the prior approval of shareholders after admission.
Impact on management time during the float process itself and afterwards in fulfilling the continuing obligations and managing investor relations.
Increased disclosure and reporting requirements for the company.
Increased pressure on management decisions given the company’s public company status and enhanced scrutiny.
How long does it all take?
The length of time which it takes to bring the company to market is influenced by many variables. The size, sector and structure of the company, the method of flotation being used, the degree and complexity of due diligence which has to be conducted by professional advisers and market conditions at the relevant time, all can impact on the timetable.
The run up to the flotation is generally described in terms of a timetable counting down to admission and “impact day” (when the full admission document (or prospectus) will be issued to investors, and the flotation officially announced). The admission process is generally regarded as starting 12 weeks before admission, depending on the size, complexity and method of flotation. The period up to 24 weeks before impact day is regarded as pre float preparation, during which time the company should prepare itself for life as a public company and discuss the planned float with potential advisers.
ONE specialises in providing Finance Directors, Company Secretaries and a finance function to companies seeking to list on AIM. ONE also assists companies with due diligence and the preparation of float documentation such as the Financial Position & Prospects Procedures document and the Working Capital Report.
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For further information contact Matt Wood by email to Matt.Wood@oneadvisory.london or telephone to 020 7583 8304.
This note does not constitute and should not be construed as legal advice. Specific legal or other appropriate professional advice should be taken before acting on any of the topics covered.