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Preemptive setup
Internal decision-making process
Capital Increase
The launch of an SPO must be preceded by a Company´s resolution of share capital increase approved by the General Meeting, unless the Board of Directors is authorised by the company’s by-laws to resolve on share capital increases up to a limit therein foreseen.
The Company’s resolution can provide that in the event the share capital increase is not fully subscribed, the value of the increase will be limited to the subscriptions collected, otherwise the share capital increase will be considered without effect.
Legal right of pre-emption in the capital increase by new cash contributions
Company’s shareholders, on the date of the resolution to increase the share capital, are entitled to subscribe to the new shares with preference in relation to the other investors, except if their pre-emption rights are suppressed or limited by the company, provided that the corporate interest so justifies (such as the entrance of a strategic partner for the company).
Shareholders that decide not to take up their subscription rights can sell them to other investors (in the stock market or over-the-counter).
Negotiation agreements and appointment of financial intermediaries
Similarly to what happens in an IPO process, the Company may decide to appoint advisors to assist on the preparation of the Prospectus and the placement of the offering. For further information on the appointing process and types of agreements please refer to section ‘4.1.2.1.4. Negotiation agreements and appointment of financial intermediaries’.
Engagement with the Regulator, the Stock Exchange and CSD
Similarly to an IPO, it is recommended that the Company, and its advisors, engage, at an early stage of the SPO, with the following entities to agree on the calendar and filing of the required documentation: (i) CMVM, for the approval procedure of the Prospectus; (ii) Euronext, for the admission of the newly issued shares; and (iii) Euronext Securities, for the exercise of the subscription rights and other procedures of the share capital increase.
Due DiIligence
Although not mandatory, the Company may wish to perform a Due Diligence process to assure the completeness, reliability and accuracy of all the information that will be included in the Prospectus and assure that all the obligations arising from the SPO are being met. Nonetheless, given the Company is already public and has to disclose to the market all relevant information, typically these Due Diligence processes are less cumbersome and time consuming. Please refer to the section ‘4.1.2.2. Due Diligence’ for additional information.
In an absence of a Due Diligence process, the minimum requirement is a reliance letter issued by the auditor or certified accountant, regarding the reported financial information and the information to be included in the Prospectus.
Prospectus / information document
SPOs must be preceded by the previous disclosure of a Prospectus or an Information Document, in order to ensure sufficient transparency and investor protection, under the same terms better detailed in sections ‘4.1.2.3. Prospectus’ and ‘4.1.4.2.2. Information document’.
Certain SPOs shall be exempted from the obligation to publish an admission to trading prospectus, if the shares being admitted to trading are fungible with other shares already admitted to trading on a regulated market provided that they represent, over a period of 12 months, less than 20 % of the number of shares already admitted to trading on such market.
The EU Prospectus Regulation allows Issuers to choose to draw up a simplified prospectus under the simplified disclosure regime for secondary issuances. This is a simplified Prospectus for secondary offerings, which aims to facilitate fundraising on capital markets, reducing the cost of capital and avoid imposing unnecessary burdens on Issuers.
When can a company choose to draw up a simplified Prospectus for secondary issuances?
The following companies may decide to draw up a simplified Prospectus when making a Public Offer of securities:
► Issuers whose securities have been admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months and who issue securities fungible with existing securities which have been previously issued;
► Issuers whose equity securities have been admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months and who issue non-equity securities or securities giving access to equity securities fungible with the existing equity securities of the issuer already admitted to trading;
► Offerors of securities admitted to trading on a regulated market or an SME growth market continuously for at least the last 18 months;
► Issuers whose securities have been offered to the public and admitted to trading on an SME growth market continuously for at least two years, and who have fully complied with reporting and disclosure obligations throughout the period of being admitted to trading, and who seek admission to trading on a regulated market of securities fungible with existing securities which have been previously issued.
Marketing
The first communication to the market regarding the decision to proceed with the capital increase and the correspondent offering will occur with the release of the convening notice for the General meeting to resolve on the capital increase.
Further Communications and Marketing efforts need to be performed under the same rules for the IPO as presented in section ‘4.1.2.5. Marketing and Communication Planning’ for further information on this.
However, being a public company already known to the market and with a lot of information available, the marketing efforts for the offering will depend mostly on who the recipients of the offer are, the size of the offering as well of the interest that the public may have on the company.
