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LR 5.2 Cancelling listing

FSA may cancel listing

LR 5.2.1RRP

The FSA may cancel the listing of securities if it is satisfied that there are special circumstances that preclude normal regular dealings in them. [Note: article 18(2) CARD]

Examples of when FSA may cancel

LR 5.2.2GRP

Examples of when the FSA may cancel the listing of securities include (but are not limited to) situations where it appears to the FSA that:

  1. (1)

    the securities are no longer admitted to trading as required by these rules; or

  2. (2)

    the issuer no longer satisfies its continuing obligations for listing, for example if the percentage of shares in public hands falls below 25% or such lower percentage as the FSA may permit (the FSA may however allow a reasonable time to restore the percentage, unless this is precluded by the need to maintain the smooth operation of the market or to protect investors); or

  3. (3)

    the securities listing has been suspended for more than six months.

LR 5.2.3GRP

The FSA will generally cancel the listing of a listed company's securities when it completes a reverse takeover.

Cancellation at issuer's request

LR 5.2.4RRP

An issuer must satisfy the requirements applicable to it in LR 5.2.5 R to LR 5.2.11 R and LR 5.3 before the FSA will cancel the listing of its securities at its request.

LR 5.2.4AGRP

1LR 5.2.4 R applies even if the listing of the securities is suspended.

Cancellation of listing of ordinary shares1

LR 5.2.5RRP

Subject to LR 5.2.6 R1 LR 5.2.7 R, LR 5.2.10 R and LR 5.2.12 R, 1an issuer that wishes the FSA to cancel the listing of any of its equity shares 1with a primary listing must:

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  1. (1)

    send a circular to the holders of the securities. The circular must:

    1. (a)

      comply with the requirements of LR 13.3.1 R and LR 13.3.2 R (contents of all circulars);

    2. (b)

      be submitted to the FSA for approval prior to publication; and

    3. (c)

      include the anticipated date of cancellation (which must be not less than 20 business days following the passing of the resolution referred to in paragraph (2));

  2. (2)

    obtain, at a general meeting, the prior approval of a resolution for the cancellation from a majority of not less than 75% of the holders of the securities as (being entitled to do so) vote in person or, where proxies are allowed, by proxy;

  3. (3)

    notify a RIS, at the same time as the circular is despatched to the relevant security holders, of the intended cancellation and of the notice period and meeting; and

  4. (4)

    also notify a RIS of the passing of the resolution in accordance with LR 9.6.18 R.

LR 5.2.5AR

1An issuer that wishes to cancel the secondary listing of its ordinary equity shares must also comply with the requirements in LR 5.2.5 R if:

  1. (1)

    the shares have previously been converted from being primary listed to secondary listed; and

  2. (2)

    the conversion has taken place within 2 years before the proposed cancellation of the secondary listing of the shares.

LR 5.2.6R

An issuer is not required to seek the prior approval of the holders of the ordinary equity shares 1for which a cancellation is being sought in accordance with LR 5.2.5 R (2) or LR 5.2.5A R1 if the shares 1are admitted to trading on a regulated market in an EEA State when the cancellation takes effect.

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LR 5.2.7RRP

LR 5.2.5 R (2) and LR 5.2.5A R1 will alsonot apply where an issuer of ordinary equity shares1 notifies a RIS;

1
  1. (1)

    that the financial position of the issuer or its group is so precarious that, but for the proposal referred to in LR 5.2.7 R (2), there is no reasonable prospect that the issuer will avoid going into formal insolvency proceedings;

  2. (2)

    that there is a proposal for a transaction, arrangement or other form of reconstruction of the issuer or its group which is necessary to ensure the survival of the issuer or its group and the continued listing would jeopardise the successful completion of the proposal;

  3. (3)

    explaining;

    1. (a)

      why the cancellation is in the best interests of those to whom the issuer or its directors have responsibilities (including the bodies of securities holders and creditors, taken as a whole); and

    2. (b)

      why the approval of shareholders will not be sought prior to the cancellation of listing; and

  4. (4)

    giving at least 20 business days notice of the intended cancellation.

Requirements for cancellation of other securities

LR 5.2.8RRP

An issuer that wishes the FSA to cancel the listing of listed securities (other than ordinary equity shares 1with a primary listing or ordinary equity shares to which LR 5.2.5A R apply1) must notify a RIS, giving at least 20 business days notice of the intended cancellation but is not required to obtain the approval of the holders of those securities contemplated in LR 5.2.5 R (2).

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LR 5.2.9RRP

Issuers with debt securities falling under LR 5.2.8 R must also notify, in accordance with the terms and conditions of the issue of those securities, holders of those securities or a representative of the holders, such as a trustee, of intended cancellation of those securities, but the prior approval of the holders of those securities in a general meeting need not be obtained.

Cancellation in relation to takeover offers

LR 5.2.10RRP

LR 5.2.5 Rand LR 5.2.5A R do not apply to the cancellation of ordinary equity shares of an issuer 5 when, in the case of a takeover offer:

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  1. (1)

    the offeror has by virtue of its shareholdings and acceptances of the offer, acquired or agreed to acquire issued share capital carrying 75% of the voting rights of the issuer; and

  2. (2)

    the offeror has stated in the offer document or any subsequent circular sent to the security holders that a notice period of not less than 20 business days prior to cancellation will commence either on the offeror attaining the required 75% as described in LR 5.2.10 R (1) or on the first date of issue of compulsory acquisition notices under section 9791 of the Companies Act 20061 (Right of offeror to buy out minority shareholder1).

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LR 5.2.11RRP

In the circumstances of LR 5.2.10 R, the company must notify the security holders that the required 75% has been attainedand that the notice period has commenced and of the anticipated date of cancellation or the explanatory letter or other material accompanying the section 979 2notice must state that the notice period has commenced and the anticipated date of cancellation.

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1Cancellation as a result of schemes of arrangement etc

LR 5.2.12RRP

1LR 5.2.5 R, LR 5.2.5A R and LR 5.2.8 R do not apply to the cancellation of ordinary equity shares of an issuer as a result of:

  1. (1)

    a takeover or restructuring of the issuer effected by a scheme of arrangement under Part 13 of the Companies Act 19852; or

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  2. (2)

    an administration or liquidation of the issuer pursuant to a court order under the Insolvency Act 1986.