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Tuesday, September 26, 2017 
Market Status: CLOSE
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Zuzanna Kurek

Deputy Director Business Development and Marketing

Stefan Musgociu

Business Development and Marketing Specialist

Email: antreprenori@bvb.ro

Phone: (+40) (21) 307 95 00

Issuing shares

Listing requirements
How to get listed
Listing process
Listing fees
Post-listing
Recent Offerings

Listing requirements

Bucharest Stock Exchange’s AeRO market is dedicated to Small and Medium sized Enterprises that meet the following criteria:

  • are a joint-stock company (SA)
  • have anticipated market value/ equity of at least EUR 250,000
  • will have 10% free-float (10% of the shares to be in investors portfolios, available for trading), or minimum of 30 shareholders

Do you think your company is too big for listing on AeRO? Then perhaps you should consider listing on the Main Market. Read more about listing shares on the Main Market.

How to get listed

There are two ways in which company can issue shares on the stock exchange. The first one is through the sale of shares carried out by the company that wishes to attract financing for its development, and a second one, which implies a sale of a part of the stake held by one of the shareholders as a part of the exit strategy. In the second case, the funds raised are received by the seller and are not directed into the company. It is important to remember that in either way, the company’s shareholders have to adopt the decision regarding admission of company’s shares to trading. This decision has to be made by the company’s statutory body – the Board of Directors or during the General Shareholders Meeting.

As to the listing process itself, there are three distinct methods through which you can list shares of your company on the Bucharest Stock Exchange’s AeRO Market:

Initial Public Offering (IPO) – public offering of shares, which requires the preparation of a prospectus that has to be approved by the Financial Supervisory Authority (ASF) and the fulfillment of all the legal and regulatory proceedings.

Private Placement – an offering addressed to a limited number of potential investors, maximum 149. In case of private placement on AeRO, there is no need to provide a prospectus for approval to the ASF, only a memorandum* (no approval of ASF is necessary).

Technical Listing – no offering takes place before listing, which means that the shareholder structure of the company is not impacted in any way and the company simply decides to be take advantage of the benefits of being a listed company (additional visibility, credibility, transparency).  For technical listing on AeRO, only a memorandum* has to be provided.

* Memorandum is a short presentation document that includes information regarding the destination of funds obtained, the selection procedure of potential buyers, the number of shares issued and the price obtained, the method of allocation and any other relevant information. After admission to trading, the Memorandum is published on the website of the Bucharest Stock Exchange, in the section dedicated to the issuer.

Memorandum is a far shorter and more concise document than the Prospectus, which is required for an IPO on AeRO or any type of listing on the Bucharest Stock Exchange’s Main Market.

Listing process

The steps of becoming listed on AeRO can be following:

Listing fees

The costs of issuing shares on AeRO are not fixed and involve the following fees:

  • Authorized Advisor fees for the preparation of the due diligence report, company valuation, prospectus and investor presentation, investment teaser etc.
  • Auditors fees, for carrying out the audit of the financial statements
  • Prospectus fee to be paid to ASF (in case of an IPO)
  • ASF fee, which equals a percentage of the offering
  • ASF fee for registering of securities
  • Central Depository fees
  • Bucharest Stock Exchange fees, which are specified below
Type of fee Description Amount (RON, VAT excluded) Comments

Processing fee

Fee for processing the documentation for admission to trading or upgrade

250

- Charged when documents are submitted

- Not refundable

Admission fee

One-time fee, for the admission to trading on AeRO

700

- Charged after obtaining approval for listing

- It becomes a condition for beginning of trading

Maintenance fee

Annual fee, paid for maintaining the financial instruments on AeRO

2,000

- Paid within 15 days following admission and annually until January 31st, for the respective year

- It is a condition for maintenance of trading of financial instruments

Post-listing

In case of any company, listing on the stock exchange represents a new stage in the life of a company. Therefore, from the very first day of trading each listed company develops a new product – its own shares or bonds. As with any other product or service offered by a company, the issued shares or bonds will need promotion and the necessary support in order to remain attractive to their potential clients – investors. This can be achieved through various means of communication that should become an important part of the company’s daily life. As any other day-to-day activity, communication with the market will require a certain allocation of resources.

Initial promises fulfillment

A public company needs to build investors' trust from the very beginning. In case the company raised the money for own specific projects, investors need to know that the funds were spent in line with the company’s prospectus.

Mandatory reporting obligations

Transparency is a key issue for any public company. Investors need to be updated and informed regarding the important events in company's life. The key is to pass to the market, through current reports, reliable and rich in content information that will allow the investors to assess the impact of the given occurrence on the company. This means that major contracts, acquisitions, new product releases, litigations or other major developments should be communicated to the market as they have an ability to influence the stock price. This also includes negative information.

The post-listing requirements for companies listed on AeRO are less stringent than those applicable to companies listed on the Main Market. AeRO listed companies have to fulfill requirements related to transparency and reporting, on three levels: annual reports (including financial statements, notes to financial statements, the management report and the audit report), half-year reports (including balance sheet, P&L account, management report) and current reports (on decisions of general shareholders meetings or management boards acting as delegated by shareholders, mergers/splits projects, litigations, reorganizations, procedures of insolvency etc.). Quarterly reports are not obligatory for companies listed on AeRO, but highly recommended.

Financial Reporting

Financial results are some of the most significant news to share with the public. Investors appreciate detailed information such as the key drivers of revenues, operating result, net result or total assets. Best practices suggest that quarterly financial reports should be accompanied by earnings conference calls or meetings with analysts and investors.

Investor Relations

Once a company listed its shares or bon, a contact point has to be established in order to carry out a communication between the company and its investors, both current and potential. That communication is carried out by the Investor Relations Officer (IRO) whose role is to provide knowledgeable information about the company to its investors. Investor Relations duties can be also carried out by the CEO or the CFO however this solution might not be sustainable for all the companies. Apart from communication with the investors, the IRO should maintain relationship with the financial analysts in order to bring the company on the radar of the major financial institutions. Additionally, investors and analysts value the participation in regular meetings as well as access to all the relevant information right on the company’s website.

Corporate Governance

Companies listed on AeRO do not have to adhere to the Bucharest Stock Exchange’s Code of Corporate Governance. Instead, for companies listed on AeRO, BVB has developed a set of Principles of Corporate Governance, that are better adapted to this type of market

Recent Listings

Ascendia (ASC)

  • Private placement carried out in July 2016
  • Company attracted RON 1.2mn. As part of the listing process, Ascendia brought to the shareholder’s structure Romanian investment fund Certinvest Dinamic, which acquired 10% of the company
  • Additional free-float of 6%, stake held by the other shareholders
  • The company’s Authorized Advisor was Intercapital Invest

Life is Hard (LIH)

  • Technical listing carried out in December 2015
  • Main shareholders decided to list the company through the technical listing; they together put on sale a 10% stake in the company;
  • The company’s Authorized Advisor was Goldring

Bittnet Systems (BNET)

  • Private placement carried out in April 2015
  • The company received pre-listing financing of EUR 150,000 from Carpathia Capital, in exchange of 10% of the share capital
  • The company used the money raised to increase its sales force. The results of this decision were seen in the 2015 financial results when Bittnet Systems turnover reached RON 10mn (+22% vs 2014) and the net profit grew 5 times, to RON 1mn.
  • The company’s Authorized Advisor was INC