Gowling WLG acts on first migration (by way of continuation) of London Stock Exchange main market company

4 minute read
05 December 2019

Gowling WLG has acted for Upland Resources Limited, an oil & gas company whose shares are traded on the main market of the London Stock Exchange (LSE) for listed securities and are listed on the FCA's Official List (standard listing segment), on its corporate migration (by way of a continuation) to Jersey from The British Virgin Islands. This is understood to be a 'first' for an LSE traded main market company/company whose shares are listed on the FCA's Official List.

One of the principal reasons for the migration was to bring the Company within the scope of the City Code on Takeovers and Mergers - and the equality of treatment which that would afford to the Company's shareholders generally. In addition, Upland Resources Limited's migration to Jersey meant that its shares could be enabled in CREST, whereas previously, as a BVI-incorporated company, depositary interest arrangements had to be set up to ensure its securities were eligible for electronic settlement.

Jeff Elway, Corporate Partner at Gowling WLG, led on the transaction. He said: "We are pleased to have advised Upland Resources Limited on what we understand to be the first migration, by way of continuation, for an LSE traded main market company.

"The 'migration by way of continuation' procedure is not a procedure that corporate law practitioners in the UK are generally familiar with, given that it can't be used for migrating a company to or from the UK. However, the procedure means that the Company continues its legal existence notwithstanding the migration and is effectively 're-incorporated' in the new jurisdiction - no new company is brought into existence and the existing issued shares in the company are unaffected, as is the listing (save for new ISIN and SEDOL numbers relative to the new jurisdiction having to be applied for on the migration).

"The approach of both the LSE and the FCA to the corporate migration of a main market/listed company appears to be different from the approach of the LSE's AIM Team. The AIM Team has previously required the companies concerned - including SafeCharge International Group Limited (BVI to Guernsey) and EPE Special Opportunities plc (Isle of Man to Bermuda) - to publish a Schedule 1 statement as if a 'new applicant' to AIM. In the case of Upland Resources Limited (and following formal submissions), both the FCA and LSE accepted that it was not a new applicant to listing or trading, for any purpose - so that, in particular, no Prospectus was required to be published.

"New ISIN and SEDOL numbers/codes need to be obtained and the LSE's 'Pegasus' system for applications for new ISIN numbers means that ISIN numbers cannot be applied for until the migration has actually become effective and the regulatory authority in the new jurisdiction has issued the relevant continuance certificate. Issues can therefore arise regarding settlement of trades immediately following the migration and pending the new ISIN number becoming available, but a carefully planned timetable can generally overcome these difficulties and ensure that they are kept to a very short time period (a day or two)."

Gowling WLG is recognised for its capital markets expertise and is one of the most active and successful law firms in equity raisings and stock exchange listings. The firm acts for listed companies and advises issuers, investment management houses and the investment banks and brokers that advise them. It brings together experts in tax, corporate, finance, regulatory and dispute resolution to provide a full legal service to its clients.

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