Wealth%20Index%20(UK)

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Wealth Index (UK)

• Yuan Ge
• Tel [phone]
• 44-7760236811

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• Why do firms float?
• Who is suitable and what are the requirements?
• What is the actual IPO Process?
• How long does it take?
• Who becomes involved?
• How much does it cost?
• Any tips on the process?

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• a London listing provides greater visibility to
  potential investors. Although London-based
  institutions control one of the largest pools of
  investment funds in the world, London is also a
  focus for international investors.

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Advantage

• Financing growth
• Corporate visibility, marketing, trade sale
• Acquisitions Owner management and control
• Motivate management and staff
• Exit route for some
• Directors
• Venture capitalists Operating efficiency
• Cost effective equity finance

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Disadvantages

• Greater accountability
• Lifestyle
• Expect criticism Expect pressure
• Dilution of control

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History development of AIM OFEX

• Requirement for secondary market
• The USM-1980-1996
• The Third Market-1987-1991
• The OTC market of the 1980s
• End of Rule 4.2 - 1995
• AIM - Designed for companies moving from USM and
  Rule 4.2
• OFEX- launched to replace trading facility under
  Rule 4.2 Present position

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Main Market

• Minimum of 25 shares in public hands
• 3 years trading record normally required
• Sponsors needed for certain transactions,
  including application
• Compliance with UKLA rules
• Quoted tax status

1. Company formed in 1996 UK Biotech fundraising
   climate poor
2. Purchase of US shell Company with listing on the
   USA NASD OTC BB market raised 14 million
3. AIM listing May 2003 (5 million)
4. Open offer (1 for 6) Dec 2003 (7.3 million)

AIM

• No minimum number of shares in public hands
• No prior trading record required
• Nominated adviser needed at all times, including
  application
• Flexible regulatory environment compliance with
  AIM Rules
• Unquoted tax status

• Limited plc status allowed (plc for public fund
  raising)
• No prior trading record required
• Corporate Adviser (OFEX Member) submits
  application
• Flexible regulatory environment compliance with
  OFEX Rules
• Unquoted tax status

OFEX
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Reasons for AIM listing

1. Reduce onerous US reporting requirements and fees
2. List on a more liquid market
3. Access to further capital if required
4. Attract Institutional Investment not possible on
   NASD OTC BB.

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Globally respected international market
Enhanced profile
Unique global market
Accessible wide pool of capital
Currency for acquisition
Increased Status
Market for shares
Unquoted status for tax purposes

• Association with globally respected Exchange
  brand
• Credibility when operating outside your home
  market

• AIM shares are accepted global currency for
  acquisitions
• Acquisition rules are designed for smaller,
  growing companies

• AIM is supported by robust trading services
  designed for smaller growing companies
• Market makers support liquidity through the
  provision of continuous two way prices

• Qualifying companies benefit from increased
  potential pool of investors
• Individual investors able to claim a range of tax
  benefits e.g. CGT, IHT
• EIS VCTs provide attractive tax relief for
  investors subscribing for new shares

• Over 750 companies from across the world
• Broad sector spread of companies
• Regulations specifically designed for smaller,
  growing companies

• /- 9bn funds raised to date
• Wide range of institutional and retail investors
• Further capital is cost resource efficient to
  raise
• Access to specialist capital e.g VCT, EIS

• Heightened interest in your company as AIM is
  designed around the specific needs of smaller
  companies
• Dedicated coverage by specialists in smaller
  companies

AIMs regulations have been designed with smaller
companies in mind
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Time frame costs

• 3 - 12 Months depending on preparation
• Brokers Commission 300, 000 and 5 of placement
• Legal fees 75 - 150,000
• Accountants fees 150,000
• Incidentals 100,000

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Time frame costs
Based on a 5 million IPO Around 1 million
fees if unprepared 20 of cash raised. Less if
prepared
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Valuation

• Be realistic about the floatation market cap
• Overpriced issues may fail
• Deliver the business model and the share price
  will look after itself
• Everyone needs to win

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Being Prepared

• Choose your Broker carefully
• Target and select your Broker
• (do not hawk your proposition around looking for
  the highest valuation)
• Do you need interim pre float finance?
• What is the long term strategy, move up to the
  main market?

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Being Prepared

• For rigorous due diligence
• Well organised financial history
• Well organised IP information
• Well organised customer/strategic partner
  contract details

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Being Prepared

• Clear understandable strategy business model
• (Would your teenage daughter or your Grandmother
  understand it and believe in it)?
• Well prepared numbers which look realistic
• (Be prepared to be interrogated)

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Being Prepared

• Clear understandable interesting presentation of
  the business
• (Use a laptop with pictures and digital movies
  not endless copy)
• Confident, enthusiastic sincere delivery of the
  presentation
• (Rehearse, rehearse and rehearse again)

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Being Prepared

• Choose your Non Executive Directors with care
• What skills contacts do they bring to the
  business
• Do they empathise with the CEOs vision
• (can you work with them)

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Being Prepared

• Appoint a good PR Agency
• Get off to a good start
• Plan to have a post float news flow
• Never promise what you cannot deliver
• Understate and over perform

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Being Prepared

• Start to think behave like a plc
• Plan for 50 of the Senior executives time to be
  taken up for three to four months prior to float
• How will the business be run?

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Being Prepared

• Start to think behave like a plc
• Plan for 30 of the CEOs time post float to be
  spent in the city
• Whom will replace that time in the business ?

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• Thank You
• Yuan Ge
• Tel [phone]
• 44-7760236811
• gy101_at_yahoo.com
• www.3009.cn