IPO fever as coronavirus lockdown eases

IPO fever as coronavirus lockdown eases

IPO activity in July showed continued signs of post-pandemic recovery, as prospective companies made plans to debut on the London public markets.

On 24 July 2020, The Proof of Trust confirmed that despite widespread changes following the COVID-19 pandemic, the company intended to revive plans announced in January 2020 to seek admission of its ordinary shares to the standard segment of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange (LSE).

Historically regarded as a less attractive option than a premium listing due to the lack of potential inclusion in the FTSE indices and a lower level of regulatory protection in relation to listing requirements, standard listings have proved to be a popular choice for market entrants in the last few weeks. On 23 July, African energy company Kibo Energy announced plans for its UK subsidiary, Sloane Developments, to join the standard list of the LSE. On 27 July, Australian Securities Exchange-listed precious metals company, Castillo Copper, confirmed that it was looking for a dual listing on the standard segment of the Main Market and expected to be admitted to trading on 3 August. The news followed the announcement on 20 July by Yamana Gold, another company looking for a standard listing to add to its existing listings in Toronto and New York. This supports the findings of Market Tracker’s recent mini trend report on Standard Listings in 2019, which found that the standard segment is particularly attractive both to companies seeking a dual listing and companies in the mining, metals and extraction, and energy sectors.

Although activity on AIM remains relatively quiet, Canadian gold mining company AEX Gold is poised for admission on 31 July following a successful fundraise on 27 July of £42.5 million for new and existing shares. The company, which is currently listed on the Toronto Stock Exchange, announced that it was seeking admission to trading on AIM to ‘broaden its shareholder investor base, increase trading liquidity, and enhance the profile of the business.’ AEX will be the fifth AIM listing this year, following Elixirr International’s float earlier in July. For more on this story see our news update.

Nevertheless, despite an increased appetite for IPOs on the LSE, the opportunity to claim a big-ticket transaction in the wake of the pandemic was lost when UK telecoms group Vodafone rejected the London markets as a platform for its spin-off company, Vantage Towers, in favour of a listing on Frankfurt’s Deutsche Börse. The company stated that its choice of Frankfurt was because most of its towers are located in Germany, although UK based shareholders are rumoured to have criticised the decision. The European tower infrastructure platform was separated operationally from Vodafone in a process that began during 2019, although Vodafone retains a majority shareholding. The company expects to list in early 2021.

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