Introduction guide to dual listings on Oslo Børs and TSX

Transcription

1 Introduction guide to dual listings on Oslo Børs and TSX September 2012 DocRef 1

2 Introduction On 10 September 2010, Oslo Børs and the Toronto Stock Exchange entered into a memorandum of understanding with respect to dual listings of shares on the regulated markets operated by the two stock exchanges In Norway: Oslo Børs and Oslo Axess In Toronto: the Toronto Stock Exchange ( TSX ) and the TSX Venture ( TSXV ) Oslo Børs and TSX are the main lists of the respective exchanges whilst Oslo Axess and TSXV are set up for pre-commercial and venture companies This presentation has been prepared by Stikeman Elliott LLP and Advokatfirmaet Selmer DA, based on their significant experience for Canada Norway cross border transactions, to provide a comparison of certain listing requirements and obligations for listed companies in relation to dual listing on TSX/TSXV and Oslo Børs/Oslo Axess, respectively This presentation comprises only general information on certain Norwegian and Canadian regulations related to listing, and continuing obligations of companies listed, on Oslo Børs/Oslo Axess and TSX/TSXV, and is not a complete nor exhaustive description of such obligations or other matters that could impact the regulations or application of such regulations. This presentation is prepared for information purposes only, and shall not be considered nor construed as legal advice in any respect. No liability or responsibility are accepted as a result of this presentation DocRef 2

3 Overview of presentation Slide Time table for listing process Main listing requirements Main continuing obligations for listed companies Main prospectus requirements Certain points to observe for dual listings in Canada and Norway DocRef 3

4 Main features for listing in Oslo vs Toronto Oslo Toronto Timeline formal listing process Minimum 8 weeks ( Fast track possible) Between 13 to 18 weeks Market places Ownership spread Oslo Børs (main list) and Oslo Axess (pre-commercial) Minimum 500 for Oslo Børs (200 for secondary listed) and 100 for Oslo Axess of defined shareholders in the VPS. 25% free float TSX (main list) and TSX Venture (venture companies) Minimum 1,000,000 free trading public shares Market value MNOK 300 for Oslo Børs and MNOK 8 Minimum capitalization or minimum asset for Oslo Axess value requirement, based on industry Liquidity forecast 12 months (principle rule) Up to 18 months depending on industry Issuer categories International issuers No industry categorisation (reserve report for mineral companies) No unique material requirements (securities need to be recorded in the VPS). Certain exemptions available Three categories of issuers requirements will vary depending categorisation No unique requirements. Issuers are generally required to have some presence in Canada Sponsorship Not required Generally required unless an exemption is available DocRef 4

5 Oslo Børs and Oslo Axess Timetable for listing process Pre-listing report Pre-listing meeting Listing application Board meeting Oslo Børs min 5 days* min 15 days* min 20 days* within 45 calendar days Listing Initial contact Introduction meeting DD meeting Prospectus Newsletter Fast track possible: min 20 days* * Business days All deadlines are calculated on the basis of this date The formal listing process from the submission of the pre-listing report to the first day of trading will take minimum 2 months. A fast track process can reduce the formal listing process to 1 month DocRef 5

6 TSX and TSXV Timetable for listing process STEP 1 STEP 2 Advisory Meeting with TMX Group (operator of TSX and TSXV) staff to assess listing suitability, potential sponsorship requirement, timing and other related matters Sponsorship by a TSX participating organization (i.e. an investment bank) may be required. The weight attached to sponsorship in the application will depend upon the financial strength of an applicant. A sponsor will be responsible for reviewing and providing a written diligence report Filing of required listing documents, including: Draft listing application and principal disclosure document (i.e. prospectus or memorandum relating to the Canadian offering) Application fees Personal information forms for directors and executive officers Financial statements Articles or corporate by-laws Projected sources and uses of funds Sponsorship report (if applicable) Technical reports (for oil & gas applicants and mining) Material contracts DocRef 6

7 TSX and TSXV Timetable for listing process, cont. STEP 3 STEP 4 Reception of conditional approval from TSX, granted after the listing application is complete and accepted by the TSX Listing Committee Beginning of listing and trading following the submission of final listing documentation and satisfaction of all conditions, final approval is granted and trading may commence The formal listing process from the initial advisory meeting to the first day of trading will take about 13 weeks to 18 weeks DocRef 7

8 Listing fees Oslo Toronto Listing fees MNOK 0.45 to 0.93 for Oslo Børs and MNOK 0.4 to 0.88 for Oslo Axess, based on market capitalization, although based only on shares recorded in the VPS for secondary listings. Higher fee for fast-track listing process C$10,000 to C$200,000, as determined by the market value of the company at the point of listing. From C$7,500 to C$150,000 for international issuers Annual fees MNOK 0.14 to 1.07 for Oslo Børs and C$12,500 to C$95,000 plus variable for Oslo Axess, based on market fee rate in excess of base market capitalization, although based only on capitalization shares recorded in the VPS for secondary listings Other Other fees to consider Additional fees payable per transaction, public offerings, etc. Inter alia fee payable to the Financial Supervisory Authority of Norway for prospectuses, etc Additional fees payable per transaction, public offerings, etc. Fees payable to Canadian securities commissions DocRef 8

10 Oslo Børs and Oslo Axess Main listing requirements Market value Minimum NOK 300 million Minimum NOK 8 million Existence and operational history Three years existence and operational history (exemption may be applied for). The main part of the company s activities must not be in a pre-commercial phase No explicit requirements Historical financial The company must have published The company must have prepared at least information annual reports for the last three years one audited annual or interim report (exemption may be applied for) and interim report for last quarter Liquidity Sufficient liquidity to continue business activities in accordance with planned scale of operation for at least 12 months Sufficient liquidity to continue business activities in accordance with planned scale of operation for at least 12 months Defined shareholders Minimum 500 Minimum 100 Share price Minimum NOK 10 Minimum NOK 1 DocRef 10

11 Oslo Børs and Oslo Axess Main listing requirements cont. Free float 25% 25% Board composition Organization At least two board members independent from management, material business relations and large shareholders Adherence to Norwegian corporate governance code and sufficient resources and competence to comply with reporting requirements At least two board members independent from management, material business relations and large shareholders Adherence to Norwegian corporate governance code and sufficient resources and competence to comply with reporting requirements Tradability Freely transferable shares Freely transferable shares Specialist issuer Due diligence Reserve report with independent expert statement requirements for specialist issuers within inter alia mineral, oil and gas. Oslo Børs may accept international reporting standards and exempt from the requirement of independent expert report Industry standard for managers and Oslo Børs specific requirements Reserve report with independent expert statement requirements for specialist issuers within inter alia mineral, oil and gas. Oslo Børs may accept international reporting standards and exempt from the requirement of independent expert report Industry standard for managers and Oslo Børs specific requirements Prospectus Prospectus required Prospectus required DocRef 11

12 Oslo Børs and Oslo Axess Main exemptions for secondary listings A limited scope audit of the most recent interim report will only be required if requested by Oslo Børs The requirement of number of shareholders applies, but such that a minimum of 200 (Oslo Børs) or 100 (Oslo Axess) shareholders must have their shares registered with the Norwegian Central Securities Depository (VPS) The requirement of minimum NOK 10 (Oslo Børs) or NOK 1 (Oslo Axess) per share does not apply The company can apply for exemption from the Norwegian takeover rules The Company s local Corporate Governance Code can be adhered to instead of the Norwegian Code of Practice for Corporate Governance Oslo Børs/Oslo Axess may exempt from their due diligence requirements The TSX and Oslo Børs cooperation strives to accommodate for more efficient dual listing opportunities DocRef 12

13 TSX and TSXV Main listing requirements TSX (Oil and Gas/Mining)* TSXV (Tier 2/Oil and Gas/Mining)** Minimum assets or revenue Property requirements From C$3,000,000 to C$7,500,000 3 years proven and provable reserves or if at exploration stage, minimum 50% ownership in property (mining) No requirement Significant interest in property (mining) or C$500,000 in proved reserves or C$750,000 in proved plus probable reserves (oil and gas) Management Management, including the board of Management, including board of directors, directors, should have adequate should have adequate experience and experience and technical expertise technical expertise relevant to the relevant to the company s business and company's business and industry as well as industry as well as adequate public adequate public company experience. company experience. Companies are Companies are required to have at least two required to have at least two independent independent directors directors Historical financial information Annual financial statements for the last three years Annual financial statements for last three years * /** Se foot note on slide 14 DocRef 13

14 TSX and TSXV Main listing requirements cont. TSX (Oil and Gas/Mining)* TSXV (Tier 2/Oil and Gas/Mining)** Liquidity Adequate working capital to carry on the business Round lot owners Minimum 300 Minimum 200 Adequate to carry outstated work program or execute business plan for 12 months following the listing and C$100,000 in unallocated funds Float At least 1,000,000 freely tradable shares with an aggregate market value of C$400,000,000 Public float of 500,000 shares * Three categories of issuers: industrial, mining and oil/gas ** TSXV market divided by Tier 1 and Tier 2, where most issuers are listed in Tier 2 DocRef 14

15 TSX and TSXV Potential exemptions for secondary listings In connection with a listing application, TSX will accept certain public documents from other jurisdictions, insofar as they provide sufficient information that is similar to that in the domestic forms Once listed, TSX will not apply certain of its ongoing listing standards to issuers listed on another recognized exchange where at least 75% of the trading value and volume occurs on the other exchange in the prior 6 month period The TSX and Oslo Børs cooperation strives to accommodate for more efficient dual listing opportunities TSXV does not have any specific exemptions for dual listed companies DocRef 15

17 Main continuing obligations for listed companies Oslo* Toronto Timing for financial reporting Annual financial reports within 4 months and interim reports 2 months after end of period Accounting standard IFRS (certain limited exemptions) IFRS Annual financial reports within 90 days and interim reports 45 days after end of period Disclosure of material news Immediate disclosure of inside information (may be delayed) and certain defined corporate actions, as well as extended disclosure on larger transactions (certain exemptions for secondary listed companies available) Material change report and business acquisition report requirements and necessity to file documents affecting the rights of security holders Language Primary insider reporting Norwegian. Non-Norwegian issuers are normally granted exemptions for English language only Register requirements at Oslo Børs. Disclosure of all trades before next trading day. Insiders include large shareholders which are represented on the board of directors English or French, with special requirements for the province of Quebec Insider reports required upon becoming an insider (within 10 days) and upon trading thereafter (within 5 days). Insiders include shareholders owning more than 10 per cent of the voting rights of the company * Different rules may apply if Norway is host member state within the EEA DocRef 17

18 Main continuing obligations for listed companies cont. Disclosure of large shareholdings Oslo* Immediate disclosure when reaching, passing or falling below the following shares/rights thresholds: 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 and 90% Toronto Disclosure when becoming owner of more than 10% and each time an additional 2% or more of the outstanding securities are acquired Specialist issuers Oil and gas companies are required to file annual reserve report. No current similar requirement for mineral/mining companies Oil and gas companies are required to file reports on reserve data. Mineral companies are required to file technical reports Take over bids Mandatory offer obligation when passing an ownership to shares representing 1/3 of the votes and repeated obligation when passing 40% and 50%. Certain exemptions are available Mandatory offer obligation on same terms when the offer concerns 20% or more of the shares. Different exemptions are available * Different rules may apply if Norway is host member state within the EEA DocRef 18

20 Main prospectus requirements Prospectus requirements Oslo Marketing prospectus required for public offering of securities, and listing prospectus required for listing of securities Toronto Long-form prospectus required for initial IPO, and short-form prospectus for subsequent qualified offerings, provided eligibility criteria are met, which allows for more expedite offerings Sub-categories to prospectuses Exemptions Shorter information documents if certain exemptions are available Practical exemptions for marketing prospectuses if offered to less than 150 persons or minimum subscriptions of EUR 100,000 per investor. Practical exemption for listing prospectus if number of shares to be listed represents less than 10% of the already listed shares in the same class calculated over 12 months Additional types of prospectuses are available which are tailored to more specific issuer needs Limited number of exemptions available trading in privately placed securities is restricted, typically by way of a hold period. Exemptions for offerings to accredited investors, for minimum purchase amount of $150,000 or for certain restricted transfer of securities are available DocRef 20

21 Oslo Børs and Oslo Axess Main requirements and practical exemptions 1. Marketing prospectus Offer to subscribe for or to purchase transferable securities directed towards 150 or more persons in the Norwegian securities market, which involves an amount of at least EUR 1,000,000 calculated over a 12 month period Practical exemption: Minimum subscription and allotment amount of EUR 100,000 per investor 2. Listing prospectus Listing of transferable securities on a Norwegian regulated market, including any increases of the share capital Practical exemption: share issues of less than 10% of already listed/issued share capital in the same class over a period of 12 months (regardless in which markets the shares are marketed/listed) The prospectus shall be approved by the relevant authority in the company s home jurisdiction The Norwegian FSA will normally be the relevant approval authority for Canadian companies The Norwegian FSA will normally use 3 4 weeks to approve a prospectus. The prospectus shall be close-to-finalised document when submitted for approval A prospectus approved by the Norwegian FSA can be pass-ported and used throughout the EEA Additional prospectus requirements for specialist issuers, including inter alia mineral, oil and gas companies DocRef 21

22 TSX - Types of Prospectuses Long-Form Prospectus Used for the issuer s initial public offering As with all prospectuses, required to contain full, true and plain disclosure of all material facts relating to securities offered by the prospectus Prospectus rules set out the specific disclosure required in the long-form prospectus, including financial statements and related management s discussion and analysis 4 8 weeks preparation period and a minimum 10 working day regulatory review period Short-Form Prospectus Issuers who meet the eligibility criteria set out in the short-form prospectus rules are permitted to file a short-form prospectus (NI ) The short-form prospectus rules allow an issuer to incorporate other publicly filed documents (such as annual and interim financial statements, related management s discussion and analysis, annual information form, proxy circular and material change reports) into the short form prospectus Principal advantages of the short-form prospectus is the shorter preparation time and the shorter regulatory review period, both of which allow the issuer to raise capital on an expedited basis Shelf Prospectus If an issuer is eligible to file a short form prospectus under the basic eligibility criteria, then it is also eligible to file a base shelf prospectus A shelf prospectus is generally effective for a period of 25 months following the date of receipt Shelf prospectus allows an issuer to, in effect, be in continuous distribution with respect to the dollar value of securities that the issuer proposed to distribute within the 25-month effective period Distributions under the shelf prospectus are drawn down through the use of a shelf prospectus supplement containing the terms of the specific offering Shelf prospectuses are generally used by large issuers (e.g. banks) for debt and debt-like securities (preferred shares) DocRef 22

23 TSX Prospectus Requirement Exemptions Private Placements Limited number of exemptions available Principal exemptions from prospectus requirement available, which require a hold period for the shares issued: 1. Accredited Investor Exemption - Allows issuers to raise financing from Canadian accredited investors - Accredited Investors include: - An individual who, alone or together with a spouse, owns net financial assets worth more than $1million pre-taxes - An individual, who alone or together with a spouse, has net assets of at least $5,000,000 - An individual whose net income before taxes exceeded $200,000 in both of the lat two years and who expects to maintain at least the same level of income this year - An individual whose net income before taxes, combined with that of a spouse, exceeded $300,000 in both of the last two years and who expects to maintain at least the same level of income this year - Financial institutions, governmental agencies, insurance companies, etc. 2. $150,000 Minimum Purchase Amount - Allows issuers to raise financing without a prospectus for distributions to a person for a minimum acquisition cost of $ 150, Private Issuer Exemption - Transfer of securities must be restricted - No more than 50 beneficial owners of securities of the issuer - Purchaser is a permitted purchaser, i.e. a director, officer, employee, founder, or control person of the issuer DocRef 23

25 Certain points to observe for dual listings in Canada and Norway MOU between TSX and Oslo Børs facilitates cross border listing process Dual listing on TSX and Oslo Børs would facilitate access to separate capital markets, both recognized for strong resources sectors Several companies have been successfully dual listed in Canada and in Norway Electronic information distribution systems enabling the companies filing their own stock exchange notifications 24 hours, making the issue of different time zones less challenging Subject to both Norwegian and Canadian disclosure and reporting requirements (with certain exemptions) The Oslo stock exchange requires disclosure of fourth quarter interim report Norwegian 10% prospectus requirement applies to share issuance regardless of which market the shares are issued in (share offering solely in Canada may trigger prospectus requirement in Norway) Norwegian prospectus authorities may accept Canadian short form prospectus to fulfil Norwegian listing prospectus requirements Implementation of IFRS may be different in Norway and Canada, and financial reporting must comply with both sets of regulations EU prospectus regulations recognize (inter alia) the Canadian CIM Guidelines and Canadian Oil and Gas Evaluation Handbook as reporting standards for inclusion of reserve information for EEA prospectus purposes DocRef 25

26 Contact persons Benoit Dubord Partner BenoîtDubord is a partner practicing within StikemanElliott s corporate and securities groups and is ranked as a leading practionerin Canada in the corporate finance and securities sector by the Canadian Legal Lexpert Directory. His principally transactional practice covers several areas of corporate and securities law, with an emphasis on cross-border as well as domestic mergers and acquisitions and corporate finance. Mr. Dubord also advises market participants in relation to securities laws and stock exchange regulations. He is a member of the Finance Committee and President of the Young Entrepreneurs Committee of the Montréal office. He has previously worked at the firm s London office and he has also been seconded to a senior position in the law department of a Fortune 500 client. Lars Knem Christie Partner lkc@selmer.no Lars K Christie is heading the capital markets division of Selmer s Corporate department. Christie specialisesin securities law, company law and corporate governance, and is regularly appointedwith respect to IPOs, offerings and M&A. As a former lawyer at Oslo Børs, Christie also has experience with approvals of listing applications, prospectuses and offer documents, in addition to preparing and implementing new securities regulations. Christie is appointed external examiner and mentor for students writing their master theses on company and securities law at the Universities of Oslo and Bergen, and is member of The Norwegian Bar Association s legislative committee for stock exchange and securities law. Christie is ranked as Leading lawyer by International Financial Law Review in category Capital Markets. DocRef 26

27 Selmer offices Oslo Advokatfirmaet Selmer DA P.O 1324 Vika, 0112 Oslo, Norway Visiting address: Tjuvholmen Allé 1, 0252 Oslo Phone: Fax: Trondheim Advokatfirmaet Selmer DA P.O 869, 7409 Trondheim, Norway Visiting address: Kjøpmannsgata 52, 7010 Trondheim Phone: Fax: DocRef 27

28 Stikeman offices MONTRÉAL 1155 René-Lévesque Blvd. West, 40th Floor Montréal, QC, Canada H3B 3V2 Tel: (514) Fax: (514) TORONTO 5300 Commerce Court West, 199 Bay Street Toronto, ON, Canada M5L 1B9 Tel: (416) Fax: (416) OTTAWA Suite 1600, 50 O Connor Street Ottawa, ON, Canada K1P 6L2 Tel: (613) Fax: (613) NEW YORK 445 Park Avenue, 7th Floor New York, NY Tel: (212) Fax: (212) LONDON Dauntsey House, 4B Frederick s Place London EC2R 8AB England Tel: Fax: SYDNEY Level 12, The Chifley Tower, 2 Chifley Square Sydney N.S.W Australia Tel: (61-2) Fax: (61-2) CALGARY 4300 Bankers Hall West, 888-3rd Street S.W. Calgary, AB, Canada T2P 5C5 Tel: (403) Fax: (403) VANCOUVER Suite 1700, Park Place, 666 Burrard Street Vancouver, BC, Canada V6C 2X8 Tel: (604) Fax: (604) DocRef 28