There are a number of ways to become a listed company on the Regulated Market, the most appropriate route to listing is chosen based on a set of factors, such as: strategy, markets, or macroeconomic context.
A company has several alternatives for accessing the Regulated Market, as follows:
Regardless of the listing method employed, in order for a company to have its shares admitted to trading it should:
- be a joint stock company (SA)
- have the value of foreseeable capitalization/shareholders’ equity of at least EUR 1 mn
- have a free-float of at least 25% (shares neither owned by the company, nor by strategic investors)
- have functioned for the past 3 years and have published audited financial reports for these past 3 years.
Initial public offering (IPO)
The most common way to attract a broad investor’s base is through an initial public offering (IPO), dedicated to all investors, both retail and institutional. It refers to the first sale of company's shares to the public and the listing of these shares on a stock exchange, upon meeting all the above criteria. The shares sold via the offering are either newly-issued shares or existing shares sold by one or more of the company’s shareholders. IPOs are used by companies which are seeking funding to expand or develop.
In an IPO, the issuer need the assistance of an intermediary or group of intermediaries (consortium), which are helping to draft a prospectus, to determine the structure of the offering, the offering price and the timing of execution.
The Romanian capital market is capable of easily absorbing new large issuances, given the success of recent IPOs. Local institutional investors, such as asset managers and pension funds, are constantly seeking for new investment opportunities.
According to a recent BVB survey, an attractive company for the Regulated Market:
- has a solid financial situation with high growth potential
- belongs to a poorly represented sector on BVB, such as IT, Agribusiness, Retail, Food & Beverage, Materials, Real - Estate, Telecom, etc.
- has an estimated free-float capitalization of minimum EUR 15 mn
- does neither have excessive cash or significant investments besides the core business.
The closer a company comes to the profile outlined above, the higher the chance will be to perform a successful public offering on the Bucharest Stock Exchange.
A private placement is an offering of shares to a limited number of investors, which may be used by companies that want to get listed on BVB. A set of conditions must be met in order to perform a private placement, one of which is the maximum number of investors targeted by the offering, lower than 150. A prospectus is neither required for a private placement. However, a listing prospectus will be required at a later stage, when the company will submit the request to be admitted to trading on the Regulated Market.
A dual listing happens when a company which is already listed on another stock exchange seeks to be admitted to trading also at BVB. It may be used by companies who have business in Romania and would like to acquire more visibility or financing from a broader investor base. With certain exceptions stipulated in the applicable laws and regulations, a prospectus will be required for the company to be admitted to trading on the Regulated Market.
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Technical listing (Listing without an offer)
A company can become a listed company without having any prior offering if the size, free float and history criteria are met. A prospectus will be required for the company to be admitted to trading on the Regulated Market.
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Transfer from ATS
After reaching a certain size and development stage when higher financing or increased visibility are searched for, companies listed on the Alternative Trading System (ATS) may consider accessing the Regulated Market. The transfer will attract a new range of investors and may increase the liquidity of the company’s shares. A prospectus will be required for the company to be admitted to trading on the Regulated Market.
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Transfer from RASDAQ
The transfer to the Regulated Market may be an option also for companies listed on RASDAQ market following the mass privatization program from the 90s, which are aiming at financing or increased visibility. This transfer will attract new investors and may increase the liquidity of its shares. A prospectus will be required in order for the company to be admitted to trading on the Regulated Market.
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