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What you should know about a Euronext Growth Oslo listing

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2021 was yet another year of record activity on Euronext Growth Oslo – with as many as 61 new listings. In the following are some key facts you should know about a listing on this rapidly expanding marketplace.

Euronext Growth Oslo (formerly Merkur Market) has never before welcomed as many newcomers as in 2021. The companies admitted to Euronext Growth last year is part of a group of 145 companies listed on the marketplace since it was launched in January 2016.

Why choose Euronext Growth?

A listing on Euronext Growth may be an efficient way for small and medium-sized companies to raise capital and substantial funds have been raised to these companies over the past two years. The admission process is significantly quicker than that required for admission to trading on Euronext Expand or the main list on the Oslo Stock Exchange. The high market demand and the swift admission process are probably the two key reasons why Euronext Growth listings have been surging for the past two years. Besides, a Euronext Growth listing would normally smoothen the path to a subsequent uplisting to Euronext Expand or the Oslo Stock Exchange. During the second half of 2021, however, the market cooled down considerably, and only a handful of listings have been completed on Euronext Growth Oslo so far in 2022.

It is worth noting that the tax treatment of a Euronext Growth listing differs from that of a Euronext Expand or Oslo Stock Exchange listing, as the net book value of the company’s assets is the basis for calculating wealth tax, while for companies listed on Euronext Expand or the Oslo Stock Exchange, this is instead based on market value.

Moreover, some institutional investors may make a Euronext Growth listing a condition for their participation in private placements.

What are the Euronext Growth listing requirements?

Euronext Growth is a multilateral trading facility and therefore largely falls outside the scope of the Norwegian Securities Trading Act. It is however important to note that the insider trading provisions of the Securities Trading Act apply in full, thereby making Euronext Growth a marketplace investors can trust.

There is no requirement as to the total market value of the company, but the minimum market value per share is NOK 1 and the listing needs to include shares with a value of no less than EUR 2.5 million and the company must have raised at least the same amount of capital in connection with the listing or in the preceding 12 months. Furthermore, the shares of the company need to be spread across a minimum of 30 shareholders and at least 15% of the shares of companies with a Euronext Growth listing need to be spread among the public (i.e. shareholder who have no close relation to the company). Companies seeking a Euronext Growth listing will normally have a market value of a few hundred million Norwegian kroner or more. It is not recommended to list prematurely on Euronext Growth – the company should have reached a certain phase of its development and its implementation of a business plan.

A financial and legal due diligence investigation needs to be completed in advance of the listing process.

The information (admission) document requirements for companies seeking a Euronext Growth listing are less comprehensive than the prospectus requirements applicable to companies aiming for the main list, and there is no requirement for the document to be reviewed by the Financial Supervisory Authority of Norway, unless the listing is combined with a public offering.

The financial statements of companies listed on Euronext Growth need to be audited based on NGAAP, IFRS or other generally accepted accounting standards. Admission to Euronext Growth generally requires the company to have two years of financial information, but an exemption will normally be granted if there is at least one audited annual report or interim report. It is not, however, a requirement that the business operations of the company are fully up and running. No corporate governance reporting is required for companies listed on Euronext Growth, unlike those listed on Euronext Expand or the Oslo Stock Exchange.

Admission processes

The procedures for applying for admission to Euronext Growth Oslo are based on the equivalent procedures for applying for admission to trading on Oslo Børs' regulated marketplaces, but represents a much quicker process than gaining a listing on the Oslo Stock Exchange.

Following the new rules which were implemented on 1 January 2022, there are now three alternative admission processes:

Ordinary admission process

In an ordinary admission process there are pre-determined deadlines for the major steps in the process. An ordinary admission process can be completed in 15 Trading Days.

  • Formal listing preparations should commence at least one to two weeks prior to listing (but planning starts earlier).
  • The company should submit the application form and admission document fifteen days before listing.
  • The company should hold an introductory meeting thirteen days before listing and, if applicable, participate in induction training provided by the Stock Exchange.
  • A final version of the information document should be submitted three days before listing.

Flexible process

Oslo Børs also offers a flexible process where the date of the Oslo Børs' admission meeting to consider the application will be set to suit each specific project by holding extraordinary admission meetings. The flexible process involves all the elements of the normal admission process. Accordingly, a flexible process will require a process of 15 trading days in the same way as the ordinary admission process.

Fast track process

Where issuers are particulary well prepared, Oslo Børs offers a faster and/or more customised implementation of those aspects of the process that involve Oslo Børs. With a fast track process, the time neede for the processes that involve Oslo Børs can be reduced to 9 trading days. Fast track process is offered to issuers upon request, provided that Oslo Børs considers that the issuer and the project in question are suitable for the fast track process.

Proposed changes

The current regulations for Euronext Growth entered info force on 30 November 2020. In the subsequent period, a significant number of admission processes have been carried out. Based on this, Oslo Børs has conducted a review of the current regulations and proposed certain changes:

  • A clearer role definition for Euronext Growth Advisor
  • A requirement for independent due diligence of the issuer
  • Updated requirements for becoming a Euronext Growth Advisor
  • The rules of independence of Euronext Growth Advisors are extended
  • More detailed requirements for the information document
  • The possibility of temporary admission to trading of new share classes to be removed

How can Thommessen help?

Thommessen has industry-leading experience in assisting companies with a Euronext Growth listing. Kahoot, Offshore Heavy Transport, Exact Therapeutics, Ice Fish Farm, Zaptec, TECO 2030 and Meltwater are just a few examples of companies that Thommessen assisted with a Euronext Growth listing. In 2020 and 2021, Thommessen was involved in a large portion of all Euronext Growth listings, providing us with in-depth understanding of current market practice. Extensive experience, combined with one of Norway’s strongest team of M&A and capital market lawyers, makes us the number one choice for companies seeking a Euronext Growth listing. Intense and demanding processes require an advisor which is well acquainted with the practices of the investment banks, the Oslo Stock Exchange and the market.

What is Euronext Growth?

Euronext Growth was launched in 2016 and is a marketplace for listing of, and electronic trading in, equites and equity certificates. Euronext Growth appeals to small and medium-sized companies that are looking for easier access to capital markets. Admission requirements are less stringent than for the Oslo Stock Exchange. The marketplace is also open to other companies than public limited companies, as well as to large companies that do not meet requirements for, or do not want, a full regulated market listing. Euronext Growth was formerly named Merkur Market, but changed its name when the Oslo Stock Exchange switched to its new trading platform Optiq in November 2020.

  • Source: Oslo Stock Exchange

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