This chapter applies to a shell company with, or applying for, a listing of equity shares in the equity shares (shell companies) category. It does not apply to securities of:
an investment entity that is not a closed-ended investment fund or an open ended-investment company.
A shell company is an issuer whose:
assets consist solely or predominantly of cash or short-dated securities; or
predominant purpose or objective is to undertake an acquisition or merger, or a series of acquisitions or mergers.
An issuer should consider the guidance in UKLR 21.2.5G and contact the FCA as soon as possible if at any time an issuer no longer meets the definition of a shell company as a result of completing an initial transaction to request a cancellation of listing.
For shell companies that fall within UKLR 13.1.2R(2):
‘founding shareholder’ means a shareholder who founded or established a shell company;
‘public shareholder’ means a shareholder who is not a founding shareholder, a shell company sponsor or a director; and
‘shell company sponsor’ means a person who provides any of the following to a shell company:
capital or other finance to support the operating costs of the shell company;
financial, advisory, consultancy or legal services;
facilities or support services; or
any other material contribution to the establishment and ongoing operation of the shell company.
An issuer should consider its obligation to appoint a sponsor under UKLR 4.2.1R and the requirement to obtain a sponsor’s guidance under UKLR 4.2.6R.
An issuer should consider its obligation to appoint a sponsor under UKLR 4.2.2R(2), (6) and (9) where it is applying to transfer its category of listing to the equity shares (shell companies) category from one of the following listing categories:
the equity shares (commercial companies) category;
the equity shares (international commercial companies secondary listing) category; or
the equity shares (transition) category.
An issuer should consider the obligations to contact the FCA, through its sponsor, under UKLR 13.2.2G (relating to transfer of listing category), UKLR 13.4.4R (Requirement for a suspension), UKLR 13.4.21R (relating to where the shell company no longer satisfies the conditions for which a suspension is not required) and UKLR 13.4.24R (Cancellation of listing).
The constitution of a shell company applying for a listing of equity shares in the equity shares (shell companies) category:
must provide that if the shell company has not completed an initial transaction on or before the date which is 24 months from the date of admission, it will cease operations on the date which is 24 months from the date of admission;
may provide that the period of 24 months referred to in (1) can be extended before the end of the period referred to in (1) by 3 further periods of 12 months, up to a total of 36 months, provided that:
the first 12-month extension to the period referred to in (1) is approved by the public shareholders of the shell company before the end of the period referred to in (1); and
any further 12-month extension periods are approved by the public shareholders before the end of the prior 12-month period; and
may provide that the period of 24 months referred to in (1), or the extended period referred to in (2), can be extended for a further period of up to 6 months where, before the end of the period referred to in (1) or each of the extended periods in (2), as applicable:
the approval of shareholders for an initial transaction, where such approval is sought by an issuer for the purposes of satisfying the conditions in UKLR 13.4.17G, has been obtained but the initial transaction has not completed;
a general meeting has been convened to obtain the approval of shareholders for an initial transaction, where such approval is sought by an issuer for the purposes of satisfying the conditions in UKLR 13.4.17G;
the shell company has made an announcement that:
a general meeting to obtain the approval of shareholders for an initial transaction, where such approval is sought by an issuer for the purposes of satisfying the conditions in UKLR 13.4.17G, will be convened for a date which is specified in the announcement; and
a notice to convene the general meeting referred to in (i) will be sent to shareholders, within a specified time following the announcement; or
an agreement for an initial transaction has been entered into but the initial transaction has not been completed and the shell company has not made an announcement in accordance with (c),
provided that any such extension is notified to a RIS before the end of the period referred to in (1), (2) or (3), as applicable.
An issuer which becomes a shell company and an issuer which is applying to transfer its category of listing to the equity shares (shell companies) category from the equity shares (commercial companies) category, the equity shares (transition) category or the equity shares (international commercial companies secondary listing) category under UKLR 21.5.1R(10), (16) and (17) should contact the FCA, through its sponsor, as soon as possible to discuss their application.
The FCA would generally allow a listed company that becomes a shell company a period of 12 months to comply with the requirements for listing under UKLR 13.2 and submit their application to transfer.
(1)
Where an applicant is applying for the admission of a class of equity shares to listing in the equity shares (shell companies) category, a sufficient number of shares of that class must, no later than the time of admission, be distributed to the public.
(2)
For the purposes of paragraph (1):
(a)
a sufficient number of shares will be taken to have been distributed to the public when 10% of the shares which will be in issue when admission to listing becomes effective as set out in UKLR 20.2.7G are in public hands; and
(b)
treasury shares are not to be taken into consideration when calculating the number of shares of the class.
(3)
For the purposes of paragraphs (1) and (2), shares are not held in public hands if they are:
(a)
held, directly or indirectly, by:
(i)
a director of the applicant or of any of its subsidiary undertakings;
(ii)
a person connected with a director of the applicant or of any of its subsidiary undertakings;
(iii)
the trustees of any employees’ share scheme or pension fund established for the benefit of any directors and employees of the applicant and its subsidiary undertakings;
(iv)
any person who, under any agreement, has a right to nominate a person to the board of directors of the applicant; or
(v)
any person or persons in the same group or persons acting in concert who have an interest in 5% or more of the shares of the relevant class; or
(b)
subject to a lock-up period of more than 180 days.
When calculating the number of shares for the purposes of UKLR 13.2.4R(3)(a)(v), holdings of investment managers in the same group will be disregarded where:
investment decisions are made independently by the individual in control of the relevant fund; and
those decisions are unfettered by the group to which the investment manager belongs.
The FCA will not admit shares of a shell company incorporated in a third country that are not listed either in its country of incorporation or in the country in which a majority of its shares are held, unless the FCA is satisfied that the absence of the listing is not due to the need to protect investors.
Except where UKLR 13.2.8R applies, a shell company must disclose in the prospectus published in relation to the admission to listing of the shell company’s shares the expected length of time it will take for the shell company to complete an initial transaction.
An issuer which:
is applying to transfer the category of its listing to the equity shares (shell companies) category from the equity shares (commercial companies) category, the equity shares (transition) category or the equity shares (international commercial companies secondary listing) category under UKLR 21.5.1R(10), (16) and (17); and
does not have a prospectus but, where applicable, is required to produce as part of its compliance with:
UKLR 21.5.6R(2), a circular; or
UKLR 21.5.7R(2), an announcement,
must comply with the specific requirement in (2) and UKLR 10.3.1R(1), where relevant, and have regard to the guidance in UKLR 21.5.12G.
The requirement is that an applicant must disclose the expected length of time it will take for the company to complete an initial transaction in such circular or announcement once its category of listing is transferred to the equity shares (shell companies) category.
If a shell company intends to rely on UKLR 13.4.17G, it should:
consider whether it has sufficient measures in place such that a suspension is not required in the event of an initial transaction under UKLR 13.4.17G; and
submit a letter to the FCA setting out how the shell company satisfies or will satisfy the conditions in UKLR 13.4.17G.
A listed company must at all times have equity shares admitted to trading that are in the class of equity shares which are listed in the equity shares (shell companies) category.
Where a listed company has more than one class of equity shares listed in the equity shares (shell companies) category, it must have equity shares of each class admitted to trading.
A listed company must ensure that the listed equity shares are at all times freely transferable.
A listed shell company must comply with UKLR 13.2.1R at all times.
A listed shell company must:
obtain the approval of its board for an initial transaction before it is entered into; and
ensure that the following do not take part in the board’s consideration of the initial transaction and do not vote on the relevant board resolution:
any director who is, or an associate of whom is, a director of the target or of a subsidiary undertaking of the target; and
any director who has a conflict of interest in relation to the target or a subsidiary undertaking of the target.
(1)
A listed shell company must comply with UKLR 13.2.4R at all times in respect of its listedequity shares.
(2)
A listed shell company must notify the FCA without delay if it does not comply with the continuing obligation set out in UKLR 13.3.4R.
If a listed shell company is contemplating any action related to its share capital, including purchasing or redeeming its equity shares, the shell company should consider the impact it has on its ability to comply with UKLR 13.3.4R(1).
If a listed shell company makes a notification under UKLR 13.3.4R(2), it should consider seeking a cancellation of listing. In particular, the shell company should note UKLR 21.2.2G(2) and UKLR 21.2.3G.
A listed shell company must notify the FCA without delay if it does not comply with any continuing obligation set out in:
UKLR 13.3.2R; or
When further equity shares of the same class as equity shares that are listed are issued, the listed company must comply with the requirements in UKLR 3.2.2R in relation to such further equity shares.
A listed shell company must forward to the FCA, for publication, by uploading to the national storage mechanism, a copy of:
all circulars, notices, reports or other documents to which the listing rules apply, at the same time as any such documents are issued; and
all resolutions passed by the shell company, other than resolutions concerning ordinary business at an annual general meeting, as soon as possible after the relevant general meeting.
A listed shell company must notify a RIS as soon as possible when a document has been forwarded to the FCA under UKLR 13.3.9R unless the full text of the document is provided to the RIS.
A notification made under (1) must set out where copies of the relevant document can be obtained.
A listed shell company must ensure that the FCA is provided with up-to-date contact details of at least one appropriate person nominated by it to act as the first point of contact with the FCA in relation to the shell company’s compliance with the listing rules, the disclosure requirements and the transparency rules.
A listed shell company must ensure that any temporary document of title (other than one issued in global form) for a share:
(1)
is serially numbered;
(2)
states, where applicable:
(a)
the name and address of the first holder and the names of joint holders (if any);
(b)
the pro rata entitlement;
(c)
the last date on which transfers were or will be accepted for registration for participation in the issue;
(d)
how the shares rank for dividend or interest;
(e)
the nature of the document of title and the proposed date of issue;
(f)
how fractions (if any) are to be treated; and
(g)
for a rights issue, the time, being not less than 10 business days calculated in accordance with UKLR 9.4.6R, in which the offer may be accepted, and how shares not taken up will be dealt with; and
(3)
if renounceable:
(a)
states in a heading that the document is of value and negotiable;
(b)
advises holders of shares who are in any doubt as to what action to take to consult appropriate independent advisers immediately;
(c)
states that where all of the shares have been sold by the addressee (other than ex rights or ex capitalisation), the document should be passed to the person through whom the sale was effected for transmission to the purchaser;
(d)
has the form of renunciation and the registration instructions printed on the back of, or attached to, the document;
(e)
includes provision for splitting (without fee) and for split documents to be certified by an official of the shell company or authorised agent;
(f)
provides for the last day for renunciation to be the second business day after the last day for splitting; and
(g)
if, at the same time as an allotment is made of shares issued for cash, shares of the same class are also allotted credited as fully paid to vendors or others, provides for the period for renunciation to be the same as, but no longer than, that provided for in the case of shares issued for cash.
A listed shell company must ensure that any definitive document of title for a share (other than a bearer security) includes the following matters on its face (or on the reverse in the case of (6)):
the authority under which the shell company is constituted and the country of incorporation and registered number (if any);
the number or amount of shares the certificate represents and, if applicable, the number and denomination of units (in the top right-hand corner);
a footnote stating that no transfer of the share or any portion of it represented by the certificate can be registered without production of the certificate;
if applicable, the minimum amount and multiples thereof in which the share is transferable; and
the date of the certificate.
for shares with preferential rights, on the face (or, if not practicable, on the reverse), a statement of the conditions thereof as to capital, dividends and (where applicable) conversion.
A listed shell company whose shares are admitted to trading on a regulated market should consider its obligations under the disclosure requirements and the transparency rules.
Unless exempted in UKLR 13.3.18R, a listed shell company must:
(1)
forward to the FCA for publication a copy of one or more of the following:
(a)
the approved prospectus or listing particulars for its listed shares;
(b)
the relevant agreement or document setting out the terms and conditions on which its listed shares were issued; or
(c)
a document describing:
(i)
(ii)
limitations on such rights; and
(iii)
the procedure for the exercise of such rights,
produced in accordance with the relevant Annex in PRM App 2 that would have applied had the shell company been required to produce a prospectus for those listed shares; and
(2)
if the information in relation to the rights attached to its listed shares set out in the document previously forwarded in accordance with (1) is no longer accurate, forward to the FCA for publication a copy of either of the following:
(a)
a new document in accordance with (1); or
(b)
a document describing or setting out the changes which have occurred in relation to the rights attached to the shell company’s listed shares.
The documents in UKLR 13.3.15R must be forwarded to the FCA for publication by uploading them to the national storage mechanism.
The purpose of UKLR 13.3.15R is to require companies to maintain publicly available information in relation to the rights attached to their listed shares so that investors can access such information.
A listed shell company is exempt from UKLR 13.3.15R where:
it has previously forwarded to the FCA for publication, or otherwise filed with the FCA, a document specified in UKLR 13.3.15R(1);
if the information in relation to the rights attached to its listed shares set out in the document previously forwarded or filed in accordance with (1) is no longer accurate, it has forwarded to the FCA for publication, or otherwise filed with the FCA, a copy of either of the following:
one of the documents specified in UKLR 13.3.15R(1); or
a document describing or setting out the changes which have occurred in relation to the rights attached to the shell company’s listed shares; and
the documents in (1) and (2) have been forwarded to the FCA for publication, or otherwise filed with the FCA, by:
forwarding them for publication on a location previously identified on the FCA website where the public can inspect documents referred to in the listing rules as being documents to be made available at the document viewing facility; or
uploading them to the national storage mechanism.
An overseas shell company must appoint a registrar in the United Kingdom if:
there are 200 or more holders resident in the United Kingdom; or
10% or more of the shares are held by persons resident in the United Kingdom.
A listed shell company must notify a RIS as soon as possible (unless otherwise indicated in this rule) of the following information relating to its capital:
any proposed change in its capital structure, save that an announcement of a new issue may be delayed while marketing or underwriting is in progress;
any redemption of listed shares, including details of the number of shares redeemed and the number of shares of that class outstanding following the redemption;
any extension of time granted for the currency of temporary documents of title; and
the results of any new issue of listed equity securities or of a public offering of existing shares or other equity securities.
Where the shares are subject to an underwriting agreement, a listed shell company may, at its discretion and subject to the disclosure requirements and contents of DTR 2, delay notifying a RIS as required by UKLR 13.3.20R(4) for up to 2 business days until the obligation by the underwriter to take or procure others to take shares is finally determined or lapses. In the case of an issue or offer of shares which is not underwritten, notification of the result must be made as soon as it is known.
A listed shell company whose securities are admitted to trading on a regulated market should consider its obligations under DTR 4 (Periodic Financial Reporting), DTR 5 (Vote Holder and Issuer Notification Rules) and DTR 6 (Continuing obligations and access to information).
A listed shell company that is not already required to comply with the transparency rules must comply with DTR 4, DTR 5 and DTR 6 as if it were an issuer for the purposes of the transparency rules.
A listed shell company that is not already required to comply with DTR 7.2 (Corporate governance statements) must comply with DTR 7.2 as if it were an issuer to which that section applies.
A listed shell company that is not already required to comply with DTR 7.3 (Related party transactions) must comply with DTR 7.3 as if it were an issuer to which DTR 7.3 applies, subject to the modifications set out in UKLR 13.3.26R.
For the purposes of UKLR 13.3.25R, DTR 7.3 is modified as follows:
(1)
DTR 7.3.2R must be read as if the words ‘has the meaning in UK-adopted IFRS’ are replaced as follows:
‘has the meaning: (1) in UK-adopted IFRS; or (2) Where the listed shell company prepares annual consolidated financial statements in accordance with accounting standards which have been determined to be equivalent to UK-adopted IFRS and which are set out in the TD Equivalence Decision: (a) in UK-adopted IFRS; or (b) in the equivalent accounting standards in accordance with which its annual consolidated financial statements are prepared, at the choice of the listed shell company.’ |
(2)
DTR 7.3.8R(2) and DTR 7.3.8R(3) do not apply.
(3)
DTR 7.3.9R must be read as follows:
(a)
as if the words ‘after obtaining board approval’ are replaced by ‘after publishing an announcement in accordance with DTR 7.3.8R(1)’; and
(b)
the reference to DTR 7.3.8R must be read as a reference to DTR 7.3.8R as modified by UKLR 13.3.26R(2).
(4)
In DTR 7.3.13R, the references to DTR 7.3.8R must be read as references to DTR 7.3.8R as modified by UKLR 13.3.26R(2).
This section applies:
to a listed shell company that intends to enter into an initial transaction; and
regardless of whether the listed shell company acquires the equity shares of a target within the same category of listing as the shell company.
In UKLR, an ‘initial transaction’ means a transaction consisting of:
An acquisition of a part of or the entirety of a business, a company and/or assets by a listed shell company or a subsidiary of a listed shell company;
the entry into a loan or any form of financing agreement by a listed shell company or a subsidiary of a listed shell company; or
the entry into a joint venture agreement by a shell company or a subsidiary of a listed shell company.
Paragraph (1)(a) applies whether such acquisition is effected:
by way of a direct acquisition by the listed shell company or a subsidiary of the listed shell company;
by way of the listed shell company introducing a new holding company to its corporate structure and then carrying out the acquisition through the new holding company; or
in any other way.
For the purpose of UKLR 13.4.2R, the FCA considers that:
the first transaction that a listed shell company enters into will generally constitute an initial transaction; and
provided that a transaction falls within UKLR 13.4.2R, a transaction of any size may constitute an initial transaction.
A listed shell company must, through its sponsor, contact the FCA as early as possible in the following circumstances:
before the announcement of an initial transaction which has been agreed or is in contemplation, to discuss whether a suspension of listing is appropriate; or
where details of the initial transaction have leaked, to request a suspension.
Examples of where the FCA will consider that an initial transaction is in contemplation include situations where:
the listed shell company has approached the target’s board;
the listed shell company has entered into an exclusivity period with a target; or
the listed shell company has been given access to begin due diligence work (whether or not on a limited basis).
Generally, when an initial transaction between a listed shell company and a target is announced or leaked, there will be insufficient publicly available information about the proposed transaction (which includes transactions under contemplation as well as those where terms have been agreed) and the listed shell company will be unable to assess accurately its financial position and inform the market accordingly. In this case, the FCA will often consider that suspension will be appropriate, as set out in UKLR 21.1.2G(3) and (4). However, the FCA may agree with the listed shell company, through its sponsor, that a suspension is not required if the FCA is satisfied that:
there is sufficient publicly available information about the proposed transaction (which includes transactions under contemplation as well as those where terms have been agreed); or
where the listed shell company is an issuer which falls within UKLR 13.1.2R(2), the listed shell company has sufficient measures in place to protect investors and so that the smooth operation of the market is not temporarily jeopardised.
UKLR 13.4.8G to UKLR 13.4.21R set out circumstances in which the FCA will generally be satisfied that a suspension is not required.
The FCA will generally be satisfied that there is sufficient information in the market about the proposed transaction if:
the target has equity shares or certificates representing equity securities admitted to a regulated market; and
the listed shell company makes an announcement stating that the target has complied with the disclosure requirements applicable on that regulated market and providing details of where information disclosed pursuant to those requirements can be obtained.
An announcement made for the purpose of UKLR 13.4.8G(2) must be published by means of a RIS.
The FCA will generally be satisfied that there is sufficient publicly available information in the market about the proposed transaction if the target has equity securities admitted to an investment exchange or trading platform that is not a regulated market and the listed shell company:
confirms, in a form acceptable to the FCA, that the disclosure requirements in relation to financial information and inside information of the investment exchange or trading platform on which the target’s securities are admitted are not materially different from the disclosure requirements under DTR and the disclosure requirements; and
makes an announcement to the effect that:
the target has complied with the disclosure requirements applicable on the investment exchange or trading platform to which its securities are admitted and provides details of where information disclosed pursuant to those requirements can be obtained; and
there are no material differences between:
the disclosure requirements applicable on the investment exchange or trading platform to which its securities are admitted; and
the disclosure requirements under DTR and the disclosure requirements.
A written confirmation provided for the purpose of UKLR 13.4.10G(1) must be given by the sponsor.
An announcement made for the purpose of UKLR 13.4.10G(2) must be published by means of a RIS.
Where the target in an initial transaction by a listed shell company is not subject to a public disclosure regime, or if the target has securities admitted on an investment exchange or trading platform that is not a regulated market but the listed shell company is not able to give the confirmation and make the announcement contemplated by UKLR 13.4.10G, the FCA will generally be satisfied that there is sufficient publicly available information in the market about the proposed transaction such that a suspension is not required where the listed shell company makes an announcement containing:
(1)
financial information on the target covering the last 3 years. Generally, the FCA would consider the following information to be sufficient:
(a)
profit and loss information to at least operating profit level;
(b)
balance sheet information, highlighting at least net assets and liabilities;
(c)
relevant cash flow information; and
(d)
a description of the key differences between the listed shell company’s accounting policies and the policies used to present the financial information on the target;
(2)
a description of the target, to include key non-financial operating or performance measures appropriate to the target’s business operations and the information as required under section 10 (Trend information) of PRM App 2 Annex 1 for the target;
(3)
a declaration that the directors of the listed shell company consider that the announcement contains sufficient information about the business to be acquired to provide a properly informed basis for assessing its financial position; and
(4)
a declaration confirming that the listed shell company has made the necessary arrangements with the target vendors to enable it to keep the market informed without delay of any developments concerning the target that would be required to be released were the target part of the listed shell company.
An announcement made for the purpose of UKLR 13.4.13G must be published by means of a RIS.
A listed shell company, through its sponsor, must provide written confirmation to the FCA that, in its opinion, it is reasonable for the listed shell company to provide the declarations described in UKLR 13.4.13G(3) and (4).
Where the FCA has agreed that a suspension is not necessary as a result of an announcement made for the purpose of UKLR 13.4.13G the listed shell company must comply with the obligation under article 17(1) of the Market Abuse Regulation on the basis that the target already forms part of the enlarged group.
The FCA will generally be satisfied that a listed shell company which falls within UKLR 13.1.2R(2) has sufficient measures in place to protect investors and so that the smooth operation of the market is not temporarily jeopardised such that a suspension is not required where the following conditions are met:
at the date of admission, the aggregate gross cash proceeds received by the listed shell company in consideration for the listed shares issued by it to public shareholders were at least £100 million;
the listed shell company has adequate binding arrangements in place with an independent third party to ensure that the aggregate gross cash proceeds received in consideration for any listed shares that it has issued, or issues, to (where relevant) public shareholders are protected from being used for any purpose other than:
to provide the consideration for an initial transaction which has been approved by:
its board, in accordance with (4); and
its public shareholders, in accordance with (5);
to redeem or purchase listed shares held by public shareholders following the exercise of the right to be redeemed or purchased referred to in (7);
to be distributed to public shareholders if an initial transaction has not been completed by the date specified in UKLR 13.2.1R; or
to return capital to public shareholders in the event of a winding up of the company;
the listed shell company’s constitution provides for the matters set out in UKLR 13.2.1R;
the listed shell company’s constitution:
provides that the listed shell company must obtain the approval of its board for an initial transaction before it is entered into; and
ensures that the following do not take part in the board’s consideration of the initial transaction and do not vote on the relevant board resolution:
any director who is, or an associate of whom is, a director of the target or of a subsidiary undertaking of the target; and
any director who has a conflict of interest in relation to the target or a subsidiary undertaking of the target;
the listed shell company’s constitution:
provides that the listed shell company must obtain the approval of its shareholders for an initial transaction either:
before the transaction is entered into; or
if the transaction is expressed to be conditional on that approval, before it is completed; and
ensures that any founding shareholder, shell company sponsor or director does not vote on the relevant resolution;
the listed shell company’s constitution provides that where any director has a conflict of interest in relation to the target or a subsidiary undertaking of the target, the listed shell company must publish, in sufficient time before shareholder approval for an initial transaction is sought, a statement by the board that:
the proposed transaction is fair and reasonable as far as the public shareholders of the listed shell company are concerned; and
the directors have been so advised by an appropriately qualified and independent adviser;
the holders of the listed shares have the right to require the listed shell company to redeem or otherwise purchase their shares for a pre-determined amount, which is exercisable:
at the discretion of the holder prior to completion of an initial transaction; and
whether or not the holder voted in favour of the initial transaction on any shareholder resolution to approve the transaction; and
the listed shell company has disclosed the matters set out in (2) to (7) in the prospectus published in relation to the admission to listing of the listed shell company’s shares.
A specified amount or proportion of the cash proceeds referred to in UKLR 13.4.17G(2) may be excluded from the amount which is protected, and may be retained to be used by the listed shell company for legitimate purposes prior to the completion of any proposed initial transaction, where that amount or proportion has been disclosed in the prospectus published in relation to the admission to listing of the listed shell company’s shares.
For the purposes of (1), legitimate purposes prior to the completion of any proposed initial transaction include:
quantified costs relating to the proposed initial transaction;
deferred underwriting costs;
operating costs and taxes relating to a binding arrangement under UKLR 13.4.17G(2), where applicable; and
due diligence costs in relation to the proposed initial transaction.
In order for the FCA to be satisfied for the purposes of UKLR 13.4.6G(2), the listed shell company must provide a written confirmation from the board to the FCA that:
the conditions set out in UKLR 13.4.17G have been met;
the listed shell company has complied with the requirements in UKLR 13.2.1R and will continue to comply with UKLR 13.3.2R to UKLR 13.3.3R until an initial transaction is completed; and
the conditions set out in UKLR 13.4.17G(2) to (7) will continue to be met until an initial transaction is completed.
A listed shell company, through its sponsor, must provide written confirmation to the FCA that, in its opinion, it is reasonable for the listed shell company to provide the confirmations set out in (1), if requested to do so.
Where the FCA has agreed that a suspension is not necessary as a result of the listed shell company meeting the conditions set out in UKLR 13.4.17G and having provided the written confirmations set out in UKLR 13.4.19R, the listed shell company must make an announcement via a RIS of the initial transaction under UKLR 13.4.22R.
A listed shell company must contact the FCA, through its sponsor, as soon as possible if, at any time after the written confirmations referred to in UKLR 13.4.19R have been provided to the FCA, any of the conditions set out in UKLR 13.4.17G(2) to (7) are no longer met, to request a suspension of listing.
A listed shell company must, in relation to an initial transaction:
notify a RIS as soon as possible after the terms of an initial transaction are agreed; and
subject to the modifications set out in UKLR 13.4.23R, comply with the requirements of UKLR 7.3 (Significant transactions) and UKLR 7 Annex 2 (Notification requirements) for the initial transaction.
For the purposes of UKLR 13.4 (Initial transactions), UKLR 7.3 (Significant transactions) and UKLR 7 Annex 2 (Notification requirements) are modified as follows:
References to ‘significant transactions’ must be read as a reference to an initial transaction.
References to ‘listed company’ must be read as a reference to a listed shell company.
The reference in UKLR 7.3.1R(2)(a) to UKLR 7 must be read as a reference to UKLR 13.
UKLR 7.3.2R, UKLR 7.3.5G(3), UKLR 7.3.13R(1)(d) and (3), UKLR 7.3.14R(2) and UKLR 7 Annex 2 1.1R(15) do not apply.
A listed shell company must contact the FCA, through its sponsor, as early as possible:
before an initial transaction which has been agreed or is in contemplation is announced; or
where details of the initial transaction have leaked,
to discuss whether a cancellation of the listed shell company’s listing is appropriate on completion of the initial transaction.
If a listed shell company is proposing to enter into a transaction classified as an initial transaction, it should consider UKLR 21.2.2G and UKLR 21.2.5G.
As set out in UKLR 21.2.5G, where a listed shell company completes an initial transaction, the FCA will generally seek to cancel the listing of a shell company’s equity shares and, where relevant, the shell company’s other listed securities.
If a listed shell company intends to cancel the shell company’s listing, the shell company is required to notify a RIS in accordance with UKLR 21.2.17R.
Where a listed shell company’s listing is cancelled following completion of an initial transaction, the shell company must re-apply for the listing of the equity shares.
Where a shell company re-applies for the listing of the shell company as enlarged by the initial transaction, the FCA will take into account any information it considers appropriate, including whether the shell company has complied with, since listing, its obligations under the listing rules, disclosure requirements, transparency rules and corporate governance rules.
A listed shell company should consider the impact of an initial transaction on any other of its listed securities, such as warrants.
On the completion of an initial transaction, if the shell company’s equity shares are admitted to the equity shares (shell companies) category following re-application, the FCA will generally be satisfied that a cancellation of the listing of the shell company’s other listed securities will not be required.
Where, on completion of an initial transaction, the shell company’s equity shares are not admitted to the equity shares (shell companies) category, a shell company should re-apply for the listing of a shell company’s listed securities, other than its equity shares, and satisfy the relevant requirements for listing.
