Different Types of ListCos
The following tables and narrative summarise the required listing criteria for different types of companies seeking a listing on the JSE Main Board or ALTx.
Main Board ListCos
All non-specific ListCos that are not Special Purpose Acquisition Companies ("SPACs"), mineral/oil or gas companies, property entities, investment entities, secondary listings, ALTx company applicants Weighted Voting Share Structures ("WVSS") companies or BEE companies or structures ("SPV") must comply with the table on the next page.
| Listing criteria | Section 2 – Main Board | |||||||||||
| Historical criteria 1 | Historical criteria 2 | Historical criteria 3 | Historical criteria 4 | |||||||||
| Audited Cons/Co AFS ("AFS") – number of historical financial years required ("FYE") | 3 | 3 | 1 | 1 | ||||||||
| Most recent FYE AFS show pre-tax "headline" profit of at least: | R15m | <R15m | R15m | <R15m | ||||||||
| Most recent FYE AFS show Net Asset Value excluding minority interests ("NAV") of at least: | R50m | R500m | R50m | R500m | ||||||||
| Control criteria | Control (>50%); or Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months | Control (>50%); or Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months | Control (>50%); or Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months | Control (>50%); or Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months | ||||||||
| Minimum number of shares issued and listed | 25m | 25m | 25m | 25m | ||||||||
| Free float comprising public sh/h | 10% and at least 100 sh/h | 10% and at least 100 sh/h | 10% and at least 100 sh/h | 10% and at least 100 sh/h | ||||||||
| Maturity of business status | Mature | Mature | Maturing Underlying assets = similar/interdependent/complementary | Development stage -Has been in existence for at least 12 months | ||||||||
Equity shares granted a listing have a pari passu structure whereby all shareholders holding such shares have equal voting and economic power/interests. However, the JSE allows for WVSS that will provide certain shareholders with disproportionately higher voting rights compared to their economic interests in such shares. There are detailed requirements in order to attempt to safeguard against the abuse of minorities in such structures, including, inter alia:
- the WVSS Share structure may not be adopted by an existing ListCo;
- WVSS Shares will not be listed (only listing of ordinary shares allowed);
- holders of both WVSS Shares and ordinary shares may not dispose of/transfer either their WVSS Shares or ordinary shares for 12 months post listing;
- a 20 to 1 limitation of enhanced voting power;
- inclusion of the WVSS structure in the MOI;
- a 10-year life, subject to ordinary shareholders' voting to extend the life;
- conversion of a WVSS Share into a non-WVSS Share if sold/transferred to any person;
- holder(s) of WVSS Shares must hold =/> 10% of ListCo's economic interest on listing;
- sh/h of ordinary shares =/> 10% of total ordinary shares voting rights must have the ability to demand a GM;
- certain matters remove the enhanced voting power of WVSS Shares and require voting of all shares on a one-share-one-vote basis in GM on these matters;
- new WVSS shares may only be issued in respect of rights offers, bonus issues, cap issues, scrip dividends, consolidations and sub-divisions, in each case offered in the same ratios in conjunction with ordinary shares; and
- disclosure is required of the WVSS structure on the cover page of circulars, ARs and announcements.
Section 3 – Secondary Listings
Application by a foreign listed ListCo for secondary dual listing status onto the Main Board or ALTx is allowable subject to compliance with the relevant listing criteria as follows:
- comply with Main Board or ALTx listing criteria;
- have a primary listing on an approved exchange or local exchange, which is equivalent to either the Main Board or ALTx.
Application for a fast-track listing or Dual Listed Company structure must comply with detailed JSE LR.
Depositary receipt listings are included in Schedule 8 and have similar requirements to secondary listings.
Section 13 – Property Entities
A ListCo that only/predominantly owns property and receives rental income from such property may apply to list as a property entity onto the Main Board of the JSE. In accordance with either historical or forecast criteria in the table below.
| Section 13 – Main Board | ||||||
| Listing criteria | Historical compliance | Forecast compliance | ||||
| Audited Cons/Co AFS ("AFS") – number of historical financial years required ("FYE") | 3 | 1 | ||||
| Most recent FYE AFS show pre-tax "headline" profit of at least: | R15m | R15m | ||||
| Most recent FYE AFS show Net Asset Value excluding minority interests ("NAV") of at least: | R50m | R50m | ||||
| Control criteria | Control (>50%); or Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months | Control (>50%); or Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months | ||||
| Minimum number ofshares issued and listed | 25m | 25m | ||||
| Free float comprising public sh/h | 10% and at least 100 sh/h | 10% and at least 100 sh/h | ||||
| Maturity of business status | Mature | |||||
| Maturity status of business | Mature | Immature | ||||
| Forecast pre-tax headline earnings for 2 FYE | N/A | R15m | ||||
| Minimum contracted + near contracted rental revenue/total rental revenue required for each forecast period | N/A | 75%+ | ||||
Real Estate Investment Trusts ("REITs") are tax-driven property entities that must comply with the following requirements in order to be recognised as a REIT on the Main Board of the JSE:
- must be a listed property entity (refer to above);
- must control the majority of portfolio assets;
- portfolio gross fair value must be a minimum of R300m;
- 75% of revenue must be rental revenue as per last FYE AFS or pro forma information;
- directors undertake to comply with Distribution Provisions (75% in cash within four months of FYE);
- directors must confirm that current or future year distributions qualify for deduction in terms of section 25BB(2) of the Income Tax Act; and
- gearing against the property portfolio may not exceed 60% of GAV as per latest historical or pro forma group AFS.
Section 14 – Minerals and Oil/Gas Companies
A ListCo that holds mineral assets or rights, being exploration companies or mining companies or oil/gas companies, may list onto the Main Board provided:
| Listing criteria | Section 14 – Main Board | ||
| NAV | R50m | ||
| Control criteria | Control (>50%); or
Reasonable spread of direct interests with active management participation; over the majority of assets for at least the last 12 months |
||
| Minimum number of shares issued and listed | 25m | ||
| Free float comprising public sh/h | 10% per listed equity class | ||
| Maturity status | Exploration/Mining – with legal entitlement to relevant rights |
Section 15 – Special Purpose Acquisition Companies ("SPACs")
Special Purpose Acquisition Companies ("SPACs") are cash shells that are allowed to list onto the Main Board of the JSE provided:
| Listing criteria | Section 2 – Main Board SPACs | ||
| NAV | R500m (ALTx R50m) | ||
| Maturity status | No business at listing date Acquisition(s) of Viable Assets within 36 months of listing Redemption right given to shareholders who vote against an acquisition of viable assets | ||
| Competence | Directors must have appropriate experience and track record regarding the acquisition of and ongoing management of viable assets |
Section 15 – Investment Companies
A ListCo holding a portfolio of non-controlled assets over which it has little, or no control may apply for a listing onto the Main Board as a "passive" Investment Company subject to:
- being exempt from compliance with normal Main Board listing criteria regarding number of years AFS, pre-tax headline earnings or NAV of at least R50m;
- being classified by FTSE as an "Investment Company";
- having audited AFS for its most recent FYE;
- having an NAV of at least R500m at date of listing;
- having only/mainly cash or an existing portfolio that has existed for at least the last 12 months;
- having satisfactory experience in managing the portfolio or have a Manco that has such experience.
ALTx ListCos
ALTx is a less regulated and more supervised market. The criteria for listing are much less onerous than for the Main Board; the most important difference being that profit history requirements are replaced with a forecast for two financial years and the sponsor requirement is replaced by a Designated Adviser ("DA"). A DA has more onerous responsibilities than a sponsor.
See table below.
| ALTx | ||||||
| Listing criteria | Criteria 1 | Criteria 2 | ||||
| Number of FYE AFS | 2 if available – otherwise 1 | 0 | ||||
| Profit forecast | Voluntary | 2 FYE = current + next FYE | ||||
| NAV of at least: | R2m | R2m | ||||
| Control criteria | Control (>50%); or Reasonable spread of direct interests with active management participation; at date of listing | Control (>50%); or Reasonable spread of direct interests with active management participation; at date of listing | ||||
| Free float comprising public sh/h | 10% and any number of sh/h | 10% and any number of sh/h | ||||
| Recommendation to list | ALTx Advisory Committee recommends listing to the JSE – JSE = final approval | |||||
| Appointment required | Designated Adviser ("DA") | DA | ||||
| Director training required | Directors Induction Programme | Directors Induction Programme | ||||
There are a number of variations applicable to the CA tables with respect to ALTx ListCos, notably, inter alia, general issues for cash may be effected up to a 50% level compared to <30%, acquisition and disposal Cat 1 transactions commence at 50% not 30%, small RP transactions are between 10% and 50% and acquisition issued only require RLP =/>100%.
Schedule 7 – BEE Segment
Definitions
- BEE SPV = ListCo – created for objective of facilitating a BEE transaction – listing of equity securities
- DSS Requirements – JSE Debt and Specialist Securities Requirements – applicable for listing of debt securities listed
- Requires sponsor/debt sponsor appointment
Listing Criteria – listing BEE securities on BEE Segment
- Minimum R10m committed capital from – either – issue at date of listing – or subscribed capital prior to listing.
- 10%+ of listed securities = held by the public.
- Must comply with DSS Requirements or JSE LR as applicable in respect of equity securities listing.
- Trading restricted to BEE persons in terms of use of a BEE contract or BEE verification agent.
- BEE Contract and BEE Verification Agent – either is applicable = legal structure – effectively indemnifies the JSE in respect of legal issues.
- BEE SPV/ListCo assets must be ring-fenced in a trust/company/other structure acceptable to the JSE that is "insolvency remote" from the underlying assets, e.g. underlying listed securities – requires engagement with the JSE to agree details.
- If underlying assets not linked to an existing JSE ListCo – requires JSE approval/acceptance of other exchange.
- If underlying assets are not listed – engage with the JSE to obtain approval.
- If underlying assets are equity in nature:
- principle = financial information of the underlying assets must be disclosed in accordance with the JSE LR; and
- only a minority interest may be held in the underlying assets.