Thomas Abrahamsen
Lars Martin Sveen
After two years of a record number of listings, 2022 was a year back to "normal" and 2023 was a year with lower capital market transactions than normal. Of the new listings in 2023, however, the majority were on Euronext Growth – with as many as 4 out of 7 listings in total. In the following are some key facts you should know about a listing on this rapidly expanding marketplace.
This article was last updated on 30 January 2024.
As of 1 January 2024, there are 109 companies listed on the marketplace and regardless of the total listing activity, we expect that this will continue to be an attractive marketplace for new listings in 2024 as well, combined with the fact that several of the companies are expected to be acquired or move up the main list. Euronext Growth thus remains relevant.
Why choose Euronext Growth?
A listing on Euronext Growth may be an efficient way for small and medium-sized companies to raise capital and substantial funds have been raised to these companies over the past years. The admission process is significantly quicker than that required for admission to trading on Euronext Expand or the main list on the Oslo Stock Exchange. The high market demand and the swift admission process are probably the two key reasons why Euronext Growth listings have been surging for the past years. Besides, a Euronext Growth listing would normally smoothen the path to a subsequent uplisting to Euronext Expand or the Oslo Stock Exchange.
It is worth noting that the tax treatment of a Euronext Growth listing differs from that of a Euronext Expand or Oslo Stock Exchange listing, as the net book value of the company’s assets is the basis for calculating wealth tax, while for companies listed on Euronext Expand or the Oslo Stock Exchange, this is instead based on market value.
Moreover, some institutional investors may make a Euronext Growth listing a condition for their participation in private placements.
What are the Euronext Growth listing requirements?
Euronext Growth is a multilateral trading facility and therefore largely falls outside the scope of the Norwegian Securities Trading Act. It is however important to note that the insider trading provisions of the Securities Trading Act apply in full, thereby making Euronext Growth a marketplace investors can trust.
There is no requirement as to the total market value of the company, but the minimum market value per share is NOK 1 and the listing needs to include shares with a value of no less than EUR 2.5 million and the company must have raised at least the same amount of capital in connection with the listing or in the preceding 12 months. Furthermore, the shares of the company need to be spread across a minimum of 30 shareholders and at least 15% of the shares of companies with a Euronext Growth listing need to be spread among the public (i.e. shareholder who have no close relation to the company). Companies seeking a Euronext Growth listing will normally have a market value of a few hundred million Norwegian kroner or more. It is not recommended to list prematurely on Euronext Growth – the company should have reached a certain phase of its development and its implementation of a business plan.
A financial and legal due diligence investigation needs to be completed in advance of the listing process.
The information (admission) document requirements for companies seeking a Euronext Growth listing are less comprehensive than the prospectus requirements applicable to companies aiming for the main list, and there is no requirement for the document to be reviewed by the Financial Supervisory Authority of Norway, unless the listing is combined with a public offering.
Following the new rules which were implemented on 1 October 2023, accounting rules for small companies cannot be used in connection with the application for admission and in the ongoing reporting for companies listed on Euronext Growth. This means that the financial statements need to be audited based on NGAAP, IFRS or other generally accepted accounting standards. Admission to Euronext Growth generally requires the company to have two years of financial information, but an exemption will normally be granted if there is at least one audited annual report or interim report. It is not, however, a requirement that the business operations of the company are fully up and running. No corporate governance reporting is required for companies listed on Euronext Growth, unlike those listed on Euronext Expand or the Oslo Stock Exchange.
Admission processes
The procedures for applying for admission to Euronext Growth Oslo are based on the equivalent procedures for applying for admission to trading on Oslo Børs' regulated marketplaces, but represents a much quicker process than gaining a listing on the Oslo Stock Exchange.
Following the new rules which were implemented on 1 January 2022, there are now three alternative admission processes:
Ordinary admission process
In an ordinary admission process there are pre-determined deadlines for the major steps in the process. An ordinary admission process can be completed in 15 Trading Days.
- Formal listing preparations should commence at least one to two weeks prior to listing (but planning starts earlier).
- The company should submit the application form and admission document fifteen days before listing.
- The company should hold an introductory meeting thirteen days before listing and, if applicable, participate in induction training provided by the Stock Exchange.
- A final version of the information document should be submitted three days before listing.
Flexible process
Oslo Børs also offers a flexible process where the date of the Oslo Børs' admission meeting to consider the application will be set to suit each specific project by holding extraordinary admission meetings. The flexible process involves all the elements of the normal admission process. Accordingly, a flexible process will require a process of 15 trading days in the same way as the ordinary admission process.
Fast track process
Where issuers are particulary well prepared, Oslo Børs offers a faster and/or more customised implementation of those aspects of the process that involve Oslo Børs. With a fast track process, the time neede for the processes that involve Oslo Børs can be reduced to 9 trading days. Fast track process is offered to issuers upon request, provided that Oslo Børs considers that the issuer and the project in question are suitable for the fast track process.
Changes in the regulations
Following the large number of listings in 2020 and 2021, questions were raised as to whether the investor protection and requirements for listing on Euronext Growth were sufficient. In light of the experiences the Oslo Stock Exchange gained, the regulations were updated as of 9 May 2022 and entailed several changes from the regulations adopted at the end of 2020. The changes entailed a clearer definition of roles, requirements for independent due diligence, expansion of the rules on independence and more detailed requirements for the information document.
On 1 October 2023, further changes were made to the rules, including the accounting standard (as mentioned above) and the standard application form when applying for admission.
How can Thommessen help?
Thommessen has industry-leading experience in assisting companies with a Euronext Growth listing. Kahoot, Offshore Heavy Transport, Exact Therapeutics, Ice Fish Farm, Zaptec, TECO 2030 and Meltwater are just a few examples of companies that Thommessen assisted with a Euronext Growth listing. Thommessen has been involved in a large portion of Euronext Growth listings, providing us with in-depth understanding of current market practice. Extensive experience, combined with one of Norway’s strongest team of M&A and capital market lawyers, makes us the number one choice for companies seeking a Euronext Growth listing. Intense and demanding processes require an advisor which is well acquainted with the practices of the investment banks, the Oslo Stock Exchange and the market.
What is Euronext Growth?
Euronext Growth was launched in 2016 and is a marketplace for listing of, and electronic trading in, equites and equity certificates. Euronext Growth appeals to small and medium-sized companies that are looking for easier access to capital markets. Admission requirements are less stringent than for the Oslo Stock Exchange. The marketplace is also open to other companies than public limited companies, as well as to large companies that do not meet requirements for, or do not want, a full regulated market listing. Euronext Growth was formerly named Merkur Market, but changed its name when the Oslo Stock Exchange switched to its new trading platform Optiq in November 2020.- Source: Oslo Stock Exchange
