How do you know if your company is suitable or ready for a listing? Do you know what a listing exercise entails? Are the directors aware of, and prepared to, undertake the stringent reporting and other continuing obligations once the company is listed?
A listing is not an end in itself. In fact, a listing status marks the beginning of a new phase of a company's life cycle - offering an abundance of opportunities to the listed issuer including enhanced public profile and increased recognition and reputation.
Apart from assessing whether your company is able to meet our listing requirements, you must also consider the wider implications of a listing exercise such as the impact it will have on your organisation as well as tax and legal implications.
A listing is a logical step in the life-cycle of companies. However, whether a listing is right for your company is dependent on the particular circumstances of each company and whether its directors and management are committed to the on-going obligations such decision entails.
A decision to list must be made after due and careful assessment of your company, its business strategy and the intentions of its shareholders and management. Preliminary questions to ask include:
what is the rationale for listing the company? For example, are its shareholders looking to realise part of their investment in the company, or is the company looking for capital to fund its development? And does a listing fit into the company's overall strategy?
|are the company and its management aware of the time and cost involved in a listing exercise?|
are the shareholders ready to accept a degree of loss of control in the company, where certain transactions may require the prior approval of the company's independent shareholders?
is the management prepared to accept the rigorous on-going obligations that is demanded of a listed company and accept closer scrutiny by the public?
are the directors aware that any changes of personnel at the board level may affect the company's share price and investor confidence?
is the company's management willing to commit time to meeting and communicating with its investors and research analysts?
will the management be able to balance the company's short term performance such as maximising shareholders' value with its longer term corporate strategy?
|are the directors aware of their fiduciary duties and restrictions on dealings once a company is listed?|
Even if you are able to answer the above questions with confidence, we strongly advise you to discuss with your advisers whether a listing is right for your company and the issues and challenges your company may face.