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15 січня 2009

Ринки капіталу 2008/09. Україна. Питання та відповіді


Автор: Вадим Самойленко
Джерело: PLC Cross-border Capital Markets Handbook. – 2009. – с.239-246

Статтю можна прочитати нижче мовою оригіналу.

Capital Markets 2008/09. Ukraine

EQUITY CAPITAL MARKETS: GENERAL

1. Please give a brief overview of the equity market(s) in your jurisdiction and initial public offering (IPO) activity generally. What were the large deals over the past year? Have there been many listings of overseas companies on your market(s)?

Trends dominating the Ukrainian equity market in 2008 were:

■ The increasing quality of corporate governance.

■ Strengthening of shareholders' and investors' rights.

■ Improving the equity ownership recording system.

■ Enhancing state regulation and control over the equity markets.

In 2008 there was a strong growth in M&A activity, especially in the industrial and banking sectors. For example:

■ Privat Group sold its steel mills to Eurogazholding, a Rus­sian corporation.

■ Interpipe Group (now know as EastOne) sold its equity in Ukrsotsbank to the UniCredit Group based in Italy.

34.25% of securities trading in the Ukrainian stock market was done by foreign investors.

IPOs of Ukrainian companies at foreign stock exchanges, such as the London Stock Exchange and AIM, amounted to UAH258.35 billion (about US$43.2 billion).

2. Is there a distinction between admission to listing and ad­mission to trading?

Admission to listing and admission to trading have different pro­cedures.

The listing procedure allows an issuer to include its shares on the register of a stock exchange. However, a stock exchange may allow trading in shares that have not been admitted to listing. Generally, this depends on the stock exchange's rules.

3. Please describe the main equity capital market(s) and sum­marise the following in relation to each market (distinguish­ing where appropriate the requirements for overseas compa­nies seeking a primary listing in your jurisdiction):

■ The regulator.

■ Any minimum size requirement

■ Any minimum trading record required.

■ Any working capital requirements.

■ Any minimum numbers of shares in public hands.

■ Number of companies traded.

■ Annual cost of being listed.

The main equity capital markets in Ukraine are the PFTS Stock Exchange (PFTS) and the Ukrainian Stock Exchange (Ukrainska Fondova Birzha) (Exchange).

pFTs stock Exchange

■ Regulator. The regulator is the Securities and Stock Market State Commission of Ukraine (Commission) (see box, The regulatory authority).

■ size limits. Issuers must have:

□ net assets of at least UAH100 million (about US$16.7 million) (UAH50 million (about US$8.4 million) for

second tier listing);

□ annual income for the last financial year of more than UAH100 million (UAH50 million for the second tier listing);

□ not have made a loss in the results of any two of the last three financial years (or during the last financial year for second tier listing);

□ a market capitalisation of at least UAH100 million (UAH50 million for second tier listing);

□ at least 500 shareholders (100 for second tier listing).

■ Trading record. No minimal trading record is required. To be listed, the issuer must have been in existence for at least three years.

■ Working capital. The issuer must have a minimum working capital of 1,250 minimum statutory salaries at the date of the issue's incorporation. The minimum statutory salary is UAH681,250 (about US$114,012).

■ Shares in public hands. There is no requirement for a mini­mum numbers of shares to be in public hands.

■ Number of companies traded. There are 203 companies traded on PFTS.

■ Annual cost. The issuer must pay an annual fee of UAH2,040 (about US$341) to PFTS.

Ukrainian Stock Exchange

■ Regulator. The regulator is the Commission.

■ Size limits. This is the same as for the PFTS (see above, PFTS: Size limits).

■ Trading record. This is the same as for the PFTS (see above, PFTS: Trading Limits).

■ Working capital. This is the same as for the PFTS (see above, PFTS: Working capital).

■ Shares in public hands. This is the same as for the PFTS

(see above, PFTS: Shares in public hands).

■ Number of companies traded. There are 100 companies traded on the Exchange.

■ Annual cost. The issuer must pay an annual fee of UAH2,380 (about US$398) to the Exchange for the first year and UAH1,530 (about US$256) for each flowing year.

IPOs ON THE MAIN EQUITY CAPITAL MARKET(S)

4. What are the main ways of structuring an IPO?

IPOs can be structured as either:

■ A public offering to more than 100 persons (except the shareholders).

■ A private offering (placement) to no more than 100 pre­determined persons (except shareholders).

5. Outline the procedure for a company applying for a primary listing of its shares in your jurisdiction. Is the procedure dif­ferent for an overseas company? Is an overseas company likely to seek a listing for shares or depositary receipts?

Procedure

The procedure for a company applying for a primary listing (pub­lic offering of its shares) includes the following steps:

■ The general meeting adopts a decision to issue shares.

■ Drafting the prospectus.

■ Filing the shares issue decision, the prospectus and any supporting documents with the Commission.

■ Registering the issue and the prospectus after which the Commission issues a temporary issue registration certificate.

■ Engaging an underwriter, if needed.

■ Obtaining an international identification number for the shares.

■ Entering into agreement with a depositary or shares registrar to record and transfer title to the shares.

■ Manufacturing share certificates or allocation of the global shares issue certificate at the depository.

■ Publishing the prospectus.

■ Selling the shares.

■ The issuer approves the results of the offering and the report thereon for the Commission.

■ The issuer's general meeting of shareholders amends its charter to increase the authorised capital.

■ Registering the charter amendment with the state company registrar.

■ Filing the shares allocation report and supporting docu­ments with the Commission.

■ The Commission registers the shares allocation report.

■ The Commission issues the issue registration certificate.

■ Filing a copy of the issue registration certificate with the shares registrar or depositary.

■ Publishing the shares allocation report.

■ Admitting the shares to listing on a stock exchange. Overseas companies

The procedure for a primary listing is basically the same as for foreign companies as it is for overseas companies. However, sev­eral differences do exist, including that the shares of a foreign company must be registered with the Commission.

In addition, any shares issued in Ukraine by an overseas company must be:

■ Registered with a depositary in the issuer jurisdiction.

■ Listed at a stock exchange (or allowed for trading on an OTC market) in the issuer's home jurisdiction.

■ Listed at one of the following stock exchanges: New York, American, Tokyo, Toronto, Hong Kong, Frankfurt or London.

An overseas company is likely to seek a listing for shares.

6. Briefly outline the role of advisers commonly used for an IPO.

The following advisers are commonly used by an issuer in an

IPO:

■ Brokers and dealers to buy and sell securities.

■ Underwriters to place securities for the issuer.

■ Depositaries to record and transfer title to deposited securi­ties of the issuer and investors.

■ Lawyers to review and advise on any documents to be filed with the Commission and to advise generally on the issuer's corporate actions.

■ Auditors to give their opinion on the issuer's financial stand­ing for filing with the Commission.

7. What are the principal documents produced in an IpO?

The principal documents produced in an IPO are the:

■ The decision of the issuer's authorised body, usually the general meeting of shareholders, to carry out the IPO (both for public and private offerings).

■ Prospectus (for public offerings only).

8. Please summarise the requirements for a prospectus (or oth­er main offering document).

It is only mandatory to publish securities in a public offering of securities. The Commission must approve the prospectus and register the issue before the publication.

9. Are there any exemptions from the requirements for a pro­spectus (or other main offering document)?

There are no exemptions from the requirement to publish a pro­spectus in a public offering of securities.

10. Please outline the contents of the prospectus (or other main offering document).

A prospectus must contain:

■ Information on the issuer and its financial condition, includ­ing:

□ name and address of the issuer and the amount of its share capital;

□ the issuer's executive authority and its officials;

□ annual financial statements and so on.

■ A clear and detailed description of the number, type, par value and sale price of the issued shares.

■ A detailed description of the procedure of the issue, includ­ing:

□ time limits;

□ the rights of shareholders and outside investors to participate;

□ paying for the shares and their delivery;

□ relevant corporate actions of the issuer.

■ Disclosure of detailed information on:

□ the fnancial condition of the issuer;

□ the issuer's commercial activities;

□ the designated use of the funds obtained from the issue;

□ all companies in which the issuer owns 10% (or more) of the equity.

11. How is the prospectus (or other main offering document) pre­pared and verified?

The issuer, its officials and advisers (including the underwriter, if any) prepare and sign the prospectus before its submission to the Commission.

The prospectus must conform to the corporate decision to issue the shares and be certified by an independent auditor.

The Commission verifies information contained in the prospectus against the supporting documents filed by the issuer and its own records.

12. Who is responsible for the content of the prospectus (or other main offering document) and any liability arising from its contents?

The following are responsible for the prospectus:

■ The head of the executive body of the issuer who signed the prospectus.

■ The auditor of the issuer who signed the prospectus.

■ The head of the executive body of any adviser to the issuer who signed the prospectus.

13. Briefly explain the ways used to market an IPO.

The ways used to market an IPO are as the following:

■ Pre-marketing.

■ Advertising.

■ Publicity in the media.

■ Road shows.

■ Presentations.

■ One-on-one meetings with key investors.

14. Describe any potential liability from publishing research re­ports by connected brokers and ways used to avoid such li­ability.

Connected brokers do not face any liability from publishing re­search reports.

15. Is the bookbuilding procedure used and if so, in what cir­cumstances?

The bookbuilding procedure is not used in Ukraine.

16. Where bookbuilding is used, how is any related retail offer dealt with?

The bookbuilding procedure is not used in Ukraine.

17. How is the underwriting for an IPO typically structured? What are the typical terms of the underwriting agreement?

The underwriter is a licensed security dealer. Usually, the under­writer sells the issued shares on behalf of, and for the account of, the issuer under an underwriting agreement with and a power of attorney given by the issuer. The underwriting agreement in­cludes among other things:

■ Total amount of the issue.

■ Quantity of the shares to be sold.

■ The shares' sale price.

■ Dates of beginning and end of the offering.

■ The shares' payment procedure.

■ The shares' delivery procedure.

■ The underwriter fee.

■ The underwriting agreement may require the underwriter to purchase any shares that remain unsold.

18. Please provide a summary of the timetable for a typical IPO.

The Commission registers the prospectus within 30 days of receiv­ing the application and supporting documents from the issuer.

The issuer must sell the shares of the issue during the term set out by the prospectus, and not later than one year from the begin­ning of the public placement or two months from the beginning of the private placement.

Within these terms the issuer must receive from the purchasers at least the par value of the shares sold, if they are sold above the par value. The shares cannot be sold below the par value.

19. Are there rules on price stabilisation in the period after trad­ing starts?

Within the statutory terms of an IPO (one year or two months), the shares must be sold at a fixed price determined in the prospectus or the share issue decision of the issuer. In any case, during this term the shares cannot be sold below par value.

20. What is the approximate cost of an IPO?

No definitive estimation can be made because the cost depends on a variety of factors, such as advisers' fees, regulatory filing fees, costs for printing the prospectus and road show expenses. The legal fees may amount up to EUR60,000 (about US$76,450). Overall, the cost is between 2% and 5% of the amount of funds raised by the issuer.

21. What are the main tax issues that arise on an IPO?

There are no particular tax issues that arise on an IPO. The pro­ceeds received by the issuer from selling the shares are not sub­ject to corporate profit tax, VAT or any other taxes.

CONTINUING OBLIGATIONS

22. Please outline any continuing obligations to which listed companies are subject, in particular:

■ The key areas covered by the obligations.

■ Whether the same rules apply to domestic and foreign com­panies and to issuers of shares and depositary receipts.

■ How these obligations are regulated and any penalties for breach.

Key areas

The key areas of continuing obligations for listed companies are:

■ The issuer must disclose its financial and business position and performance within the statutory reporting periods (an­nually and quarterly).

■ The issuer must disclose any events that may affect the is­suer's financial and business position and cause a signifi­cant change in the price of its securities.

■ The issuer must disclose any holdings of 10% or more in another company.

Domestic and foreign companies

The same rules apply to domestic and foreign companies and to issuers of shares and depositary receipts.

Regulation and penalties

All continuous disclosure requirements are regulated and control­led by the Commission. The Commission can impose a fine for:

■ Failure to disclose required information.

■ Delay in making required disclosures.

■ Intentionally providing the wrong information.

■ The fine can range from UAH850 (about US$142) to UAH1,700 (about US$285).

REFORM

23. Please summarise any proposals for reform and whether they are likely to come into force and, if so, when.

On 17 September 2008, the Ukrainian Parliament adopted the Law On Joint Stock Companies. The law aims to eliminate gaps in the corporate management sphere and protect the interests of shareholders, creditors, employees and the state. In particular the law implements the following:

■ The transfer to non-documentary (electronic) circulation of shares. This will take place within two years of the law com­ing into force and is aimed at restricting the opportunity to illegally manipulate the register of shareholders.

■ An acquirer of 10% or more of the capital fund of a joint stock company must notify the relevant company and Com­mission at least 30 days before the planned purchase.

■ An acquirer of 50% or more in the capital fund of a joint stock company must offer to purchase the shares of all the other shareholders.

■ A detailed mechanism to allow shareholders to realise their pre-emptive right to acquire newly-issued shares. This will protect existing shareholders from having their sharehold­ings diluted.

■ A new definition of significant transactions and interested party transactions will be introduced, as well as a new pro­cedure for the approving these transactions.

■ Shareholders will have additional rights to obtain informa­tion about the company's activities.

The law will come into force six months from its official publica­tion.

DEBT CAPITAL MARKETS: GENERAL

24. Please give a brief overview of the debt securities market in your jurisdiction. Has it been active? What were the major deals over the past year?

In 2008 the largest bonds placements were made by Raiffeisen Bank Aval (US$700 million (about EUR550 million)) and Donetsk Metallurgical Plant (US$600 million (about EUR471 million)).

The share of debt securities on the stock market was 33.5%. The total turnover of debt securities was UAH44.636 billion (about US$7.5 billion). Debt securities have become a popular instru­ment for financing the activities of government and business.

25. What are the different methods of raising finance through the issue of debt securities in your jurisdiction (for example, bonds or EMTN programmes)?

The following debt securities can be issued in Ukraine:

■ Corporate bonds.

■ Government bonds of Ukraine.

■ Municipal bonds.

■ Treasury bills of Ukraine.

■ Certificates of deposit.

■ Promissory notes and bills of exchange.

26. For new issues to be cleared and settled through Euroclear or Clearstream, what percentage use the New Global Note (NGN) structure? What percentage retain the classic or tradi­tional global note structure?

The NGN structure is not used by Ukrainian issuers.

27. Is there a distinction between admission to listing and ad­mission to trading for debt securities?

See Question 2.

28. please describe the main market(s) (including any exchange-regulated market or multi-lateral trading facility (MTF)) for debt securities and summarise the following in relation to each market:

■ The regulator.

■ Any minimum size requirement.

■ Any minimum trading record required.

■ Any working capital requirements.

■ Number of issues traded.

■ Annual cost of being listed.

The main debt capital markets in Ukraine are the Exchange and PFTS (see Question 3).

pfts

■ regulator. See Question 3.

■ size limits. The issuer must have:

□ at least 500 shareholders in the first tier;

□ net assets of at least UAH100 million (about US$17 million) (UAH10 million (about US$1.7 million) for the second tier of listing).

■ Trading record. The issuer must demonstrate at least five trades of its debt securities during the last six months.

■ Working capital. See Question 3.

■ Number of issues traded. There are 448 issues traded on PFTS.

■ Annual cost. See Question 3. Exchange

■ regulator. See Question 3.

■ size limits. This is the same as for the PFTS (see above, PFTS: Size limits).

■ Trading record. No minimal trading record is required. To be listed, the issuer must have been in existence for at least three years.

■ Working capital. See Question 3.

■ Number of issues traded. There are nine issues traded on the Exchange.

■ Annual cost. See Question 3.

listing on the main debt capital market(s)

29. What are the main ways of issuing debt securities on the debt capital market(s)?

Debt securities are issued in the same way as equity securities (see Question 4).

30. Briefly outline the role of advisers commonly used when issu­ing and listing debt securities.

The advisers in an issue of debt securities are the same as for an IPO (see Question 6).

31. What are the principal documents produced when issuing and listing debt securities?

The principle documents produced when issuing and listing debt securities are the same as for equity securities (see Question 7).

32. Please summarise the requirements for a prospectus (or oth­er main offering document).

The prospectus requirements when issuing debt securities are the same as for equity securities (see Question 8).

33. Are there any exemptions from the requirements for a pro­spectus (or other main offering document)?

There are no exemptions from the requirements to publish a pro­spectus.

34. Please outline the contents of the prospectus (or other main offering document).

The prospectus must contain:

■ A detailed description of the issuer's:

□ name, address and contact details;

□ executive authority and its officials;

□ legal form;

□ date of incorporation;

□ shareholders;

□ business goals;

□ authorised capital (including the amount and date of formation);

□ number of employees;

□ annual financial statements;

□ corporate governance structure.

■ Disclosure of detailed information on:

□ the financial condition of the issuer;

□ major business and financial activities;

□ the designated use of the funds obtained from the issue;

□ all companies, in which the issuer owns 10% (or more) of the equity;

□ number of shares owned by members of the executive body;

□ stock exchanges where the issuer's debt securities are traded or were traded previously;

□ previous securities issues and their results.

■ Detailed information on the debt securities to be issued, including:

□ the type and kind of the securities;

□ the date of the corporate decision to issue the securi­ties;

□ the number of securities issued;

□ the securities total par value;

□ the par value of one security.

□ the form of their issue;

□ starting and finishing dates of the securities offering;

□ maturity date(s);

□ payment procedure for the securities being sold;

□ procedure of repayment for the securities matured, including coupon payments;

□ type and procedure of interest payment to the investor (sale discount or coupon payment);

□ the relevant securities registrar or depositary;

□ stock exchange where the securities are to be listed;

35. How is the prospectus (or other main offering document) pre­pared and verified?

For debt securities, this is the same as for equity securities (see Question 11).

THE REGULATORY AUTHORITY

The Securities and Stock Market State Commission of Ukraine (Commission)

Head. Mr Anatoliy Baliuk (Chairman of the Commission)

Contact details. 8 floor, 51 Gorkogo Street

Kyiv 03680

Ukraine

T +8 044 287 06 15 F +8 044 287 75 19 E webmaster@ssmsc.gov.ua W www.ssmsc.gov.ua

Main responsibilities. The Commission is responsible for:

■ Implementing and enforcing the state's policy on securi­ties and stock markets.

■ Licensing and regulating the professional market partici­pants.

■ Issuing regulations under, and clarifications on, securi­ties and stock market laws.

■ Registering share and bond issues.

36. Who is responsible for the content of the prospectus (or other main offering document) and any liability arising from its contents?

For debt securities, this is the same as for equity securities (see Question 12).

37. Briefly explain the ways used to market debt securities.

For debt securities, this is the same as for equity securities (see Question 13).

38. Please provide a summary of the timetable for issuing and listing debt securities.

The Commission registers the prospectus within 30 days of receiv­ing the application and supporting documents from the issuer.

The issuer must sell the shares of the issue during the term set out by the prospectus, and not later than one year from beginning of the public placement or two months from beginning of the private placement.

39. What is the approximate cost of issuing and listing debt se­curities?

No definitive estimation can be made because the cost depends on a variety of factors, such as advisers' fees, regulatory filing fees, costs for printing the prospectus, road show expenses. For example, the legal fees may amount up to EUR30,000 (about

US$38,225). Overall, the cost is between 2% and 5% of the

amount of funds raised by the issuer.

40. What are the main tax issues that arise when issuing and list­ing debt securities?

For debt securities, the tax issues are the same as for equity se­curities (see Question 21).

continuing obligations

41. please outline any continuing obligations to which compa­nies with listed debt securities are subject, in particular:

■ The key areas covered by the obligations.

■ Whether the same rules apply to domestic and foreign issuers.

■ How these obligations are regulated and any penalties for breach.

For debt securities, the continuing obligations are the same as for equity securities (see Question 22).

reform

42. Please summarise any proposals for reform and whether they are likely to come into force and, if so, when.

No major changes are expected in the regulation of debt securities.

The newly adopted Law On Joint Stock Companies (see Question 23) is likely to give more confidence to investors in debt securi­ties through:

■ Strengthening the regulation of an issuer's disclosure requirements.

■ The issuer's shareholders, especially minority ones, having greater control over the company's decisions to issue new securities, the placement process and the use of the funds raised through the issue.



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