Managers cannot relax once they have completed an AIM admission because corporate governance obligations will keep them more than occupied. Daniel Bastide, a partner at law firm Thomas Eggar, discusses the burden of AIM’s disclosure rules…

Daniel Bastide, a partner at law firm Thomas Eggar, discusses the burden of AIM’s disclosure rules.

You’ve floated. After months of hard work exposing your business to a forensic examination by nomads, lawyers and accountants and having put out the Admission Document and raised funds, you’d like to move on and devote your time to running the business. Not so fast.

Admission is the end of the beginning, not the beginning of the end. You are on the market but need to turn your mind to continuing obligations. Your nomad and lawyer will brief you on these as part of the admission process, but some key ones are as follows;

AIM companies have a general duty of disclosure. This means you need to communicate to the market – without delay – any new developments which are not public knowledge concerning a change in the financial condition, sphere of activity, performance of the business or expectation thereof, which, if made public, would likely lead to a substantial movement in the price of its AIM securities. There is a high standard for these notifications. You need to ensure that they are not misleading, false or deceptive or omit anything likely to affect the import of such information. It is also important that the information is released to the market no later than it is published elsewhere.

There are also certain specific disclosures that need to be made, including dealings by directors, changes in holdings of significant shareholders, changes in directors and dividend payments. AIM-traded companies must also publish half yearly and yearly accounts. The half yearly accounts need to contain at least a balance sheet, income statement and cash flow statement together with comparative figures for the corresponding period in the preceding financial year.

Corporate transactions need to be notified to the market too if they are substantial – one that exceeds 10% in any of the class tests. Each class test involves a comparison between the size of the transaction with the AIM company. There are five percentage ratio tests: gross assets, profits, turnover, consideration to market capitalisation and gross capital.

Some corporate transactions need the prior consent of shareholders, including reverse takeovers and disposals resulting in a fundamental change to the business. Reverse takeovers are acquisitions which exceed 100% in any of the class tests or result in a fundamental change in an AIM company’s business, board or voting control. A disposal resulting in a fundamental change to a business is a disposal that exceeds 75% in any of the class tests.

Contact: Daniel Bastide (partner)
T: 0870 160 1300
E: daniel.bastide@thomaseggar.com