Slide 1/18. Rick van Aerssen. Relevant Issues for Russian Issuers on the Frankfurt Stock Exchange. Moscow, 25 May 2011

Transcription

1 Slide 1/18 Rick van Aerssen Relevant Issues for Russian Issuers on the Frankfurt Stock Exchange Moscow, 25 May 2011

2 Slide 2/18 Introduction

3 Slide 3/18 Why list on the Frankfurt Stock Exchange? Deutsche Börse is a trusted platform & leader among the international exchanges in attracting capital True international investor base from which capital can be raised High liquidity and continuous trading through Designated Sponsors (1) Top peergroups for Russian companies High visibility and investor awareness by indices e.g. DAX global Russia (Index) DAX global Russia (Index) Transparent and rule-based tracking of the Russian market with two indices Tracks the performance of the 30 largest and most liquid ADRs and GDRs based on Russian companies Balanced regulation and market credibility Deutsche Börse Four listing segments tailored to the needs of an Issuer Regulated Market General Standard Prime Standard Open Market (aka Regulated Unoffical Market) Entry Standard First/Second Quotation Board 1 Designated Sponsors are banks or financial service providers which promote liquidity and provide biding quotes for the purchase or sale of quotes.

4 Slide 4/18 How to reach out to the FSE? Depositary Receipts DR Program Issuance Flow: Deutsche Börse

5 Increasing Transparency Level Slide 5/18 Market Segments on the Frankfurt Stock Exchange Prime Standard Regulated Market (1) General Standard Regulated Unofficial Market (Open Market) (2) Entry Standard 1st/ 2nd Quotation Board 1 Regulated by German and European Union law. 2 Primarily regulated by the exchange itself (key statutory provisions, e.g. insider trading, market abuse etc., apply nevertheless).

6 Slide 6/18 Listing Requirements

7 Slide 7/18 Listing Requirements on FSE Prime Standard (1/2) Listing Authority: Frankfurt Stock Exchange (FSE) Application to be filed by the Issuer together with a bank holding a German banking licence Issuer must have existed as a company for at least three years Anticipated market value of the shares min million Free float min. 25 per cent. Publication of financial statements of the last three financial years under applicable law Supporting legal opinion may be required by FSE

8 Slide 8/18 Listing Requirements on FSE Prime Standard (2/2) Listing Prospectus Competent authority for approval is the German Financial Supervisory Authority (BaFin) Must include the (consolidated) financial statements for the last three financial years Financial information needs to be presented in accordance with IFRS/IAS or U.S. GAAP for the last two financial years Permission from the Russian Federal Service for Financial Markets (FSFM): Generally not more than 30 per cent. of the share capital may be placed on a foreign market Only 25 per cent. for companies of strategic importance (as defined in the Russian Strategic Industries Law) Only 5 per cent. for companies of strategic importance that are engaged in prospecting and extraction of mineral resources on the subsoil plot of federal importance

9 Slide 9/18 Prospectus

10 Slide 10/18 Prospectus Overview Prospectus to be in compliance with European Prospectus Directive (PD) Statements of European Securities Regulators (ESMA formerly CESR) German law and BaFin practice SEC standards in case of a Rule 144A deal Language of German Listing Prospectus In case of listing of GDRs English with German-language summary In case of German holding company English if the prospectus will be passported on a pro forma basis into another member state of the EU, e.g. Luxembourg Correspondence with BaFin otherwise generally in German German Listing Prospectus must be published after it has been approved by BaFin On the website of the company and/or By making available in printed form

11 Slide 11/18 Prospectus Contents Key Information to be in the Prospectus Risk factors Description of Business Competitive Position/Strengths MD&A / OFR Material Contracts Related Party Transactions Regulatory Environment Financial Statements Overall principle of disclosure All facts which are material for the assessment of the Shares Ensure consistency and coherence

12 Slide 12/18 IPO Timetable

13 Slide 13/18 Prospectus Overall IPO timetable Week: IPO Financial, business and legal due diligence Financial reporting systems (Accountants) Corporate governance structure (Legal Advisor) Drafting of prospectus/review by BaFin Liabilities/risks for selling shareholders (Legal Advisor) Board appointees (Issuer/Banks/Legal Advisor) Relationship agreement (Legal Advisor) 0 l l Pre-announcement of intention to float l l Accountants commence work on reports (Accountants) Legal due diligence commences (Legal Advisor) Drafting of the prospectus commences (Legal Advisor) Submit draft prospectus to the BaFin for comments (at approximately Week 8) - (Legal Advisor) Circulate and finalise comfort letters, legal opinions and underwriting agreement Underwriting warranties/indemnities/termination rights (Legal Advisor) Fees and expenses Orderly marketing arrangements (Legal Advisor) Stock lending (Legal Advisor) Road show presentation (Banks) Offering Period 1 Announcement of intention to float and 2 3 Price Range Agreement Publication of prospectus Determination of Price Range 5 Admission to trading l l Legal and financial due diligence must be complete (Legal Advisor/Accountants/Banks) Board meeting to approve the press release BaFin formal approval to prospectus Board meeting to approve prospectus (Issuer) Prospectus published Road show commences BaFin formal approval to prospectus supplement (Banks/Legal Advisor) After marketing, the price is set (Issuer/ Banks) price (Issuer)

14 Slide 14/18 Prospectus Timetable for Prospectus Approval by BaFin X X+13 X+16 X+26 X+28 X+31 t (Working Days) Approval of 1. Submission 1. BaFin - 2. Submission 2. BaFin - 3. Submission Approval of prospectus Comments Comments supplement

15 Slide 15/18 Continuing Obligations

16 Slide 16/18 Continuing Obligations for the Issuer Overview (1/2) Regulated Market (General Standard) Prime Standard Shares GDRs Shares GDRs Annual financial report within 4 months after the end of the reporting period (1) if Germany is the Issuer s home state (Sec. 37v WpHG, Sec. 65 BörsO) (2) ½ yearly financial report within 2 months after the end of the reporting period if Germany is the Issuer s home state (Sec. 37w WpHG) not required within 2 months after the end of the reporting period if Germany is the Issuer s home state (Sec. 66(5) BörsO) (2) (i) within 2 months after the end of the reporting period if Germany is the Issuer s home state or (ii) within 3 months after the end of the reporting period if Germany is the Issuer s home state and the Issuer is domiciled in a non-eu country (Sec. 66(5) BörsO) (2) Management Interim Statements or Quarterly Financial Reports Management Interim Statements in the period between 10 weeks before and 6 weeks after the first and second half of the financial year if Germany is the Issuer s home state (Sec. 37x WpHG) not required Quarterly Financial Report within 2 months after the end of the reporting period if Germany is the Issuer s home state (Sec. 66(5) BörsO) (2) Quarterly Financial Report (i) within 2 months after the end of the reporting period if Germany is the Issuer s home state or (ii) within 3 months after the end of the reporting period if Germany is the Issuer s home state and the Issuer is domiciled in a non-eu country (Sec. 66(5) BörsO) (2) 1 In case of GDRs of an Issuer domiciled in a non-eea country (with Germany as its home state), an exemption might be granted by BaFin on a case-by-case basis Sec. 37z(4) WpHG, Sec. 65(3) 2 BörsO. Reporting language: Issuers domiciled in a non-eea country (with Germany as its home state) may opt for English only Sec. 65(1), 66(3) BörsO.

17 Slide 17/18 Continuing Obligations for the Issuer Overview (2/2) Regulated Market (General Standard) Prime Standard Shares GDRs Shares GDRs Annual information update Disclosure of inside information Sec. 10 WpPG: A yearly information update is mandatory for Issuers whose securities are listed on a Regulated Market in Germany. Sec. 15 WpHG: Inside information must be disclosed by the Issuer of GDRs if its home state is Germany. Insider trading Sec. 14 WpHG: Insider trading is prohibited regarding shares and GDRs listed on a Regulated Market in Germany. Market abuse Sec. 20a WpHG: Market abuse is prohibited regarding shares and GDRs listed on a Regulated Market in Germany. Disclosure/approval of corporate transactions Depending on the local corporate law applicable to the Issuer. Under German corporate law, certain transactions might be subject to prior shareholders approval. Notifications relating to capital Sec. 26a WpHG: An Issuer of shares and GDRs with Germany as its home state is obliged to publish the number of voting shares at the end of a calendar month if this number has changed. Related party transactions There are no specific rules regarding related party transactions for companies listed on a Regulated Market in Germany. Website disclosure An Issuer of shares or GDRs with Germany as its home state is obliged to disclose certain information (which can include publication on the Issuer s website), e.g.: (i) Prospectus, (ii) Disclosure of voting rights, (iii) Directors Dealings and (iv) Insider information/ad hoc releases.

18 Slide 18/18 Thank you for your attention. Rick van Aerssen M E rick.aerssen@freshfields.com Rick van Aerssen has been a partner since 2005 and works in our Frankfurt and Munich offices. He is a member of our corporate and finance practice groups and focuses on corporate, takeover and securities law advice to listed companies and financial institutions. In addition, he regularly advises banks and insurance companies on structured finance transactions. He has advised on dozens of public m&a and capital markets transactions ranging from share for share offers (e.g. Unicredito/HVB), cash tender offers (e.g. PPR/Puma; Deutsche Bank/Postbank), IPOs (e.g. Brenntag, HHLA, MTU and KDG), rights offerings (e.g. K+S, Infineon, Lufthansa, Fresenius), to equity-linked, hybrid, high yield and investment grade bonds (e.g. HeidelCement, SAP, Siemens, TUI). Rick was born in Düsseldorf He studied law and economics at the University of Heidelberg, where he was an assistant to Professor Peter Hommelhoff and holds a master of laws (LLM) from the Northwestern University in Chicago. Rick joined the firm in He speaks German and English.