The official listing process will normally be initiated at a kick off meeting where the companys representatives and their chosen advisors agree a listing timetable and start the due diligence process that confirms the company is in fit shape to become a publicly traded entity. However, a well organised company will already have been working towards this event, probably for at least three months and quite possibly for six or more.

Prior to the kick off meeting the pace and nature of preparation will largely have been driven by the company itself and a small number of key advisors. After the meeting the process will be driven by the companys investment bankers and will involve a full array of advisors. It is at this point that costs escalate markedly and delays or unexpected surprises can have significant financial consequences.  It is therefore imperative that the company does everything possible in the pre-kick off phase to ensure that it is prepared for what is to come after the kick off.

We consider below what the Company can and should be doing pre-kick off and what will happen post-kick off.

Pre-kick off phase

The main objectives for a company during the pre-kick off phase should be to assess its readiness for listing and to take action to correct any deficiencies identified. Issues to be considered include the following:

Corporate Narrative

When you list a company you are effectively selling it and its history. It is therefore essential that you develop a strong corporate narrative that explains where the company has come from and where it is going. This involves articulating a clear strategy and goals that investors can believe in. You should be able to demonstrate how these will be achieved and how the money you propose to raise will help you to achieve them. All of this needs to be worked out well in advance of any listing.

Corporate Structure

Corporate structure is an issue that should be addressed early in the pre-kick off phase since restructuring can be a lengthy process. There are a number of factors that should be considered during the assessment of current corporate structure.  Any companies within a group that do not have a clear and necessary function should be eliminated. The entitys overall financial position and performance should also be considered. If there are operations or divisions that create a dent in the balance sheet or drag performance down, this may be the time to spin them off in order to strengthen what remains. Another matter to be considered is the jurisdiction of the entity to be listed. If this proves problematic in anyway it may be advisable to insert a new holding company in an appropriate jurisdiction above existing structure. Finally, dividend flows should be considered. Care should be taken to ensure that these will not be subject to any excess taxation on their way to shareholders. 

Corporate Governance 

Corporate governance will be a key issue during due diligence process that will be initiated in the run up to listing. All aspects of this should be considered in the pre-kick off phase. However, particular attention should be paid to the composition of the main board.  Almost without exception exchanges will expect to see a majority of non-executive directors on the board. Most private companies considering a listing will have limited or no non-executive presence on their board. It is therefore highly probable that the Company will need to run a campaign to attract, select and appoint a suitable number of appropriate non-executives. This can take more time than initially envisaged. It is therefore prudent to start the process early even if the expectation is that any new appointments will only be made in the post-kick off phase. The selection of a Chair is crucial with the appointment of a candidate that is well-known and respected in the sector will go a long way to ensuring success when the time comes to market the companys shares. Most boards will also require non-executives with appropriate financial and mining experience.  

Senior Management Team 

In addition to the Board, the companys senior management team will also be under close scrutiny as the company approaches the date set of its admission. The best time to address any weaknesses in the team is pre-kick off. The CEO, CFO and COO roles will be under particularly close observation.

Appointment of Advisors

The full IPO team will include not only company employees but also external professionals from a wide range of disciplines. Certain key professionals should be engaged before during the initial preparatory stages of a listing. Other appointments can be left until later in the process.  However, it will be beneficial to start the selection process relatively early on so that appointments can be made swiftly once they are necessary. The team will likely include the following: -

Lead Adviser This role is usually taken by an investment bank and will be given different names on different exchanges sometimes also being known as a Sponsor or Nominated Adviser. The primary function of the role is to guide the company through the listing process, to ensure that company is ready to meet its obligations as a listed company and to vouch for the companys suitability to list in front. The Lead Adviser will play a central role in controlling and co-ordinating the work of all the other professionals in the post-kick off phase.

Underwriter This role is also usually taken by an investment bank which may, or may not be the same as the one taking on the lead adviser role. Underwriters play a role in setting the issue price, and agree to buy any of the shares offered by the Company if it cannot sell them to institutions or the public. For providing this safety net, the underwriters charge a commission to the company.

Auditor Every listed company will require an auditor. However, the work of the auditor will normally commence well before the listing starts as it will normally be necessary for the company to present an audited financial history as part of the admission process. 

Reporting Accountant The role of the reporting accountant is to assist in the process of verifying the financial information that is presented in the companys prospectus. This work may commence during the post-kick off phase or slightly before it. Although it is not necessarily the case, usually this role will be combined, for the sake of efficiency, with the role of auditor.

Consulting Accountant During the pre-kick off phase the company will be engaged in the assessment of many matters in which auditing and consulting firms have particular competence, ranging from the assessment of internal systems of control and their suitability for a listed company to executing a corporate restructuring programme. At times some of these functions may create a conflict of interest with the role of auditor and/or reporting accountant. It is therefore common for companies planning an IPO to appoint a Consulting Accountant to carry out these functions and others such as assisting with the preparation of cash flow projections and other financial information required for the prospectus.

Legal Adviser Legal advisers will play an important part in the listing process, conducting legal due diligence and assisting in the drafting of listing documentation. A single legal firm may act for both the company and the lead adviser. Where this is considered to lead to a potential conflict of interest separate legal advisers may be appointed but the company will bear the cost in any case.

Geologist a peculiarity of IPOs for mining companies is the involvement of a geologist, sometimes referred to as a competent person. This role is necessary to ensure that appropriate due diligence is carried out in respect of the companys reserve which will usually be its main assets and the basis for the valuation of the company. Where the company has previously appointed external geologists to assess its reserves it may be possible to save costs by appointing the same firm to conduct the due diligence work.

Other professionals during the marketing and admission process companies will require the services of a range of other professionals including a share registrar and communications/PR experts.

Systems of control

Exchanges will generally have regulations requiring listed companies to have systems of control that are sufficient to ensure the reliability of financial information and to ensure that such information is produced in accordance with the required reporting timetable. The compliance of an applicant for admission will be tested more or less formally during the due diligence process. This examination will include an assessment of IT systems as well as the manual elements of the system. Many companies find the step up from the requirements applicable to private companies an onerous one and some struggle to comply. It is therefore best to assess systems well ahead of the formal due diligence process in order to allow time for any adjustments of improvements to systems required in order to make them fully compliant.

Financial History

Most stock exchanges will require companies seeking admission to present a three year history of audited financial statements in their prospectus. Where the most recent annual audited financial statements are more than a few months old, exchanges may also require the presentation of unaudited interim financial information. Early stage mining companies listing on selected exchanges may be able to avail themselves of certain exemptions from the general rules.  Whether or not it plans to take advantage of such exemptions, a company should determine as early as possible what financial information is required of it and take action to ensure that it is available.  Usually the significant majority of the required information can be prepared during the pre-kick off phase.

Financial Projections 

Prospective financial information will normally be included in the prospectus alongside historical information.  It will therefore be necessary for the company to produce financial projections in a format that is subject to easy scrutiny by the Reporting Accountant who will need to verify their reasonableness.  If the company does not already have a fully developed financial model in a format such as Excel, this will have to be produced and tested.  Again, it is best to start work on this as early as possible in the process in order to ensure that any potential problems are identified and dealt with well in advance of the due diligence process commencing.

Mineral Rights and Geological Reports

For mining companies due diligence during the IPO process typically takes up more time than it does for many other types of company due to the need to confirm the legal validity of licenses and rights and to get geological confirmation of reserves. In order to be ready for the due diligence when it commences a company should prepare by obtaining all the necessary documentation such as land contracts, governmental permits and concessions, mining certificates, environmental and safety obligations, equipment leasing agreements, etc. Geological reports can also be prepared in advance although care should be taken that they are prepared under standards that are acceptable to the exchange in question and that they are not out of date.

Assessment of Business Risk including Safety and Environmental Matters

A company seeking a listing is inevitably required to include an assessment of business risks including environmental and safety matters in its prospectus. This disclosure and evaluation must also include comments on how the risks are to be mitigated. By conducting its own assessment as early as possible the company gives itself the maximum opportunity to put in place credible mitigation if this is required.

Post-kick off phase

Although no two IPOs are identical most follow a similar pattern during the post-kick off phase.  This can be divided into three stages.  An outline of these stages and their likely duration assumption a relatively smooth transaction are as follows: 


Stage 1: Preparation (2-3 months may be considerably longer if the pre-kick off phase has not been rigorous)

  • Initiation and structuring 

  • Appointment of professional advisers who have not been engaged during the pre-kick off phase 

  • Due diligence ( Advisers carry out a due diligence review of Company under the guidance of the Lead Adviser)

  • Preparation of prospectus and roadshow materials 

  • Pre-marketing activity 

Stage 2: Execution (2-3 weeks)

  • Prospectus completed and issued

  • Marketing/roadshows during which company presents to potential investors

  • Bookbuilding of potentially interested investors

  • Underwriters set issue price in conjunction with the company 

Stage 3: Closing (3 days)

  • Closing

  • Delivery and payment 

  • Admission to trading

  • Listing

How can we help?

Moore ST has considerable experience or working with companies preparing for and going through the IPO process. Member firms of Moore Global are able to take on the role of Auditors, Reporting Accountants or Consulting Accountants for companies seeking listings in jurisdictions around the world.  

If you are considering an IPO, please do not hesitate to contact us.  We will be delighted to meet with you on a no obligation basis for an initial free consultation to discuss any questions you may have.

This piece has been prepared as a part of the series of three articles.

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Maxim Sobokarev


Moore ST Moscow

M +7 495 589 3498 (ext. 253)