The following Corporate guidance note Produced in partnership with Maegen Morrison and Danette Antao of Hogan Lovells provides comprehensive and up to date legal information covering:
This Practice Note explains the cash box structure and the principles behind its use in connection with a proposed placing by a public limited company incorporated in the UK admitted to listing on the Official List of the Financial Conduct Authority (FCA) and to trading on the Main Market of the London Stock Exchange (Main Market). This Practice Note is equally applicable to a public limited company incorporated in the UK which is admitted to trading on AIM if a cash box structure for a placing is used.
The operation of the UK listing and prospectus regime may be affected by Brexit. For further details, see Practice Note: Brexit—UK listing and prospectus regime.
The following diagram illustrates in summary how a cash box structure operates in connection with a placing:
The cash box structure works as follows:
Cashbox Co is established as a subsidiary of PLC with two classes of shares—ordinary shares and preference shares. PLC holds just less than 90% of the ordinary shares in Cashbox Co and the Investment Bank holds just over 10% of the ordinary shares. The Investment Bank agrees to subscribe for the preference shares at a premium equal to the expected net placing proceeds. Cashbox Co is typically incorporated in Jersey, because of the flexibility of Jersey company law and the
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