A guide to cash box placings
Produced in partnership with Danette Antao of Hogan Lovells and Maegen Morrison of Hogan Lovells

The following Corporate practice note produced in partnership with Danette Antao of Hogan Lovells and Maegen Morrison of Hogan Lovells provides comprehensive and up to date legal information covering:

  • A guide to cash box placings
  • The cash box structure
  • Summary, key documentation and timeline of a cash box placing
  • Step 1—establish Cashbox Co
  • Step 2—subscription and transfer agreement
  • Step 3—placing
  • Step 4—redemption of preference shares
  • Why use a cash box structure?
  • Pre-Emption Group's Statement of Principles 2015
  • Prospectus Regulation Rules
  • More...

A guide to cash box placings

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 cash box structure

The following diagram illustrates in summary how a cash box structure operates in connection with a placing:

The cash box structure works as follows:

  1. 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 absence of stamp duty on Jersey share transfers

  2. PLC agrees to allot new shares (New Shares) to the Investment Bank (or as the Investment Bank directs)

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