08/02/2024ECCTA: The continuing march towards greater UK corporate transparency and more reliable public information
On 26 October 2023, The Economic Crime and Corporate Transparency Act 2023 (the “ECCTA”) received… Read more
12/10/2018
Better valuations, lack of competition and enhanced liquidity – are these advantages of dual listing in London a new resource for Canadian mining companies?
The natural resources industry is heavily reliant on ‘traditional’ sources of capital, particularly in key jurisdictions like Canada. Globally, these sources of growth capital are being depleted by a number of competing phenomena, including ETFs and new sector focuses.
In a number of key markets, this diversion of growth capital is disrupting resource companies, with mining equity financings on TSX and TSX-V falling to 2008 levels.
However, in London the picture is slightly different. The size of the London market (all share) is $4.1tn versus Canada’s $3.0tn yet there are 1/6th the number of mining companies, with very few (42) having a market capitalization in excess of $500m.
Of the top 1,000 institutions who own LSE listed mining companies, 941 are not invested in TSX companies, although 85% of these investors are international. As well as major international funds, London offers access to unique sources of capital including UK-specific smaller company funds, special situation funds and private clients.
The Opportunity
We’ve seen LSE-listed companies trade at a premium across a variety of market valuation analyses.
But is it worth the time, cost, and headache?
There are some costs involved in dual listings, naturally. There is the price of the initial listing and ongoing listing expenses. Similarly, regulatory and accounting requirements may differ across jurisdictions which may necessitate local legal and finance expertise.
However, these are easily overstated and there is a large degree of fungibility between the markets and continuous disclosure obligations in Canada closely reflect those in London. Also, money can be raised at a lower rate of commission in London than in Canada which offsets the cost of listing.
More technical advantages…
Memery Crystal has helped dozens of companies achieve both Standard and Premium listings on the London Stock Exchange. Many were previously listed elsewhere and continue to enjoy the many advantages of dual listing.
If you have any questions on listing in London, or would like a detailed conversation to understand the impacts on your business, we’d be pleased to help or read our brief guide to achieving a standard listing on the LSE. Download the guide here.
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