- how shareholders' equity became negative, plus background information
- the company's solvency and liquidity position
- possible consequences for the continued existence of the company
- planned measures to improve solvency and liquidity
- the continuation of credit facilities and the main features of these facilities
The purpose of the change is to give the investing public better insight into the financial position of issuers with negative shareholders' equity, and to improve these companies' chances of financial recovery.
The listing measure will remain in force if the issuer files for a suspension of payments or bankruptcy. In such cases, Euronext Amsterdam restricts the duration of the listing measure to a maximum of 12 months, with a possible extension of six months if the company is undergoing restructuring. The current policy of allowing an issuer to be re-admitted to official listing provided that it can meet the applicable listing requirements and agrees to publish a prospectus will also remain in force.
These measures will come into immediate effect but are not retroactive and do not apply to issuers that are currently subject to a listing measure.
Appendix: Euronext Amsterdam announcement
EURONEXT ANNOUNCEMENT
Euronext Amsterdam policy with respect to listing measures
Article 65 of the Listing and Issuing Rules authorises Euronext Amsterdam to take listing measures, including suspension from official listing (the penalty box). This announcement contains details of the way in which the exchange uses its authority in cases involving negative shareholders' equity, the suspension of payments or bankruptcy of an issuer listed on Euronext Amsterdam.
- Listing measures in the event of a suspension of payments or bankruptcy
If an issuer has been granted a suspension or temporary suspension of payments or has filed a bankruptcy petition at its own request or at the instigation of one or more creditors, or if other comparable proceedings have been instituted against it under another country's legal system, Euronext Amsterdam will impose a listing measure and suspend the shares from official listing pursuant to article 65, paragraph 2 a of the Listing and Issuing Rules (referred to below as the listing measure).
- Consequences and duration of the listing measure
As a result of the listing measure, the issuer will be removed from any index it may be included in, with due observance of the term specified and conditions set out in the relevant index rules. The specified term is usually three months.
Euronext Amsterdam limits the duration of the listing measure to a maximum of 12 months. If the listing measure has not been lifted by the end of this period, Euronext Amsterdam will delist the issuer's securities pursuant to Article 65 paragraph 2 b of the Listing and Issuing Rules. If the issuer can satisfy Euronext Amsterdam that it has started to restructure the company within the 12-month period with a view to having the listing measure lifted, but is unable to complete the process within that period, the issuer may be granted an additional period of up to six months to restructure and be re-admitted to listing. During this period the listing measure will remain in force until the conditions for re-admission to official listing can be met. If the listing measure is still in force at the end of the six-month period, Euronext Amsterdam will delist the issuer's securities pursuant to article 65, paragraph 2 b of the Listing and Issuing Rules.
To gain re-admission, an issuer that is subject to the listing measure must meet the admission requirements regarding shareholders' equity, profits, etc., that apply at the time of re-admission, and must also publish a prospectus.
For the duration of the listing measure, the issuer must comply with the rules by which it is bound pursuant to the listing agreement. The listing measure does not automatically result in the suspension of trading in the security.
- Exemption from the listing measure in the case of negative shareholders' equity
If a company has negative shareholders' equity, the listing measure will be imposed unless the issuer can meet the publication requirements stated under 3a, 3b and 3c on the date negative shareholders' equity is confirmed. If the issuer can meet these requirements, and in the case of the continuous publication requirements mentioned in 3c, continues to meet them, Euronext Amsterdam will not impose the listing measure. The issuer will continue to be officially listed and included in any indices it may be a part of.
3a. Announcement and press release
An issuer with negative shareholders' equity should immediately notify Euronext Amsterdam, regardless of whether or not negative shareholders' equity can be regarded as a price-sensitive fact as defined in Article 28h of the Listing and Issuing Rules. The issuer should also immediately publish a press release announcing that it has negative shareholders' equity. No other matters should be included in the press release, although it may contain the information that has to be published under 3b. In that case, the second publication under paragraph 3b. is not required.
3b. Second publication
Within five trading days of the publication of the above press release, the issuer''s management should publish a press release in which it explains the company's financial situation. This second press release should focus on the issuer's financial situation and cover the following subjects as a minimum:
- causes and background details of the issuer's negative shareholders' equity;
- the issuer's solvency and liquidity position;
- short-term and long-term prospects regarding the continued existence of the company;
- measures already taken and planned measures aimed at improving the company's solvency and liquidity and, if relevant, its liquidity position;
- any credit facilities, their main features and whether they will be continued.
The issuer must publish a quarterly report within two months of the end of every quarter, which meets at least the IAS 34 requirements or the accountancy standards replacing IAS 34. It should include the following:
- balance sheet (full or summarised);
- statement of changes in shareholders' equity;
- profit and loss account (full or summarised);
- cash flow statement;
- an adequate explanation of the quarterly figures.
- Other listing measures
This announcement is without prejudice to Euronext Amsterdam's right to impose listing measures in circumstances other than those mentioned in this announcement if in its opinion facts or developments arise or have arisen with respect to a security which preclude an unconditional continuance of the official listing as provided in article 65 paragraph 3 of the Listing and Issuing Rules. The provisions of section 2 apply accordingly in such cases.
- Effective date
This announcement shall come into immediate effect. It is not retroactive and therefore does not apply to securities that were subject to a listing measure at the time of the publication of this announcement.
