“Frankfurt Shell” vs. “Listing From Scratch”
Whether you are considering a Frankfurt Shell Listing or a Listing From Scratch (sometimes called a “Direct Listing”) in order to achieve a listing on the Frankfurt Stock Exchange, a holding company structure must usually be utilized because most existing corporate structures including the US, Australian, South African, Chinese and many others, are not able to list directly on the Frankfurt Stock Exchange. So, in either case, a holding company is used and so perhaps “Listing from Scratch” would be a more fitting name than “Direct Listing” as it is sometimes referred.
Then what is the difference between a Frankfurt Shell listing and a Listing From Scratch?
- In a Frankfurt Shell listing, the operating company is merged with a holding corporation that already has an ISIN number, WKN number, stock symbol, dematerialized shares etc., and already meets the listing requirements of the Frankfurt Stock Exchange including but not limited to the paid-in-capital requirement as certified by an auditor letter, €.10 nominal share value and minimum number of shareholders.
- In a Listing From Scratch, the operating company is merged with a holding corporation that does not yet have a stock symbol or other features and does not already meet the listing requirements of the Frankfurt Stock Exchange. In this scenario, the listing is begun ‘from scratch’.
Okay, so what does this mean in practical terms?
- A Frankfurt Shell listing is a little easier than a Listing From Scratch and, in many cases, the only choice for a company that cannot otherwise meet the listing requirements of the Frankfurt Stock Exchange;
- A Frankfurt Shell listing is a bit faster than a Listing From Scratch (15 business days vs. 8 weeks);
- A Frankfurt Shell listing costs more than a Listing From Scratch.
What are the basic Frankfurt Stock Exchange listing requirements?
The basic requirements for the First Quotation Board segment of the Frankfurt Stock Exchange are as follows:
- The company must have had €500,000 in paid in capital, or assets, at some time prior to listing. The €500,000.00 in paid in capital or assets and must be confirmed by a letter from a certified auditor. There does not need to be any capital in the company upon listing. We can usually, but not always, meet this requirement with the stock swap that occurs when we merge your Company with a holding company as a paid-in-capital event.
- The company must provide a list of 30 shareholders, their address and the number of shares they own.
Which method is right for my company?
Complete the following brief online questionnaire to help determine which method is right for you:
Shell Merger vs. Listing From Scratch?
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