COVID-19 update for listed companies
Holding AGMs
The government announced on 28 March that companies which are by law to hold AGMs will be permitted to hold them safely and in a manner consistent with government advice on coronavirus. This will include holding AGMs online or postponing scheduled meetings.
This is to be enacted by way of primary legislation, which is unlikely to be passed until early May and will be timed to coincide with amendments to wrongful trading legislation which were announced at the same time.
ICSA/ the Corporate Governance Institute in conjunction with Slaughter and May has published guidance on holding AGMs during the coronavirus lockdown here.
Wrongful trading
The government stated it would temporarily suspend the wrongful trading provisions for 3 months retrospectively from 3 March 2020 to give company directors greater confidence to use their best endeavours to continue to trade during the pandemic emergency, without the threat of personal liability should the company ultimately fall into insolvency.
Company accounts / corporate reporting
The FCA issued a statement on 26 March allowing listed companies an additional two months to publish their audited financial reports. This means that, instead of the usual four months from financial year end to publish audited financial statements, listed companies will have six months.
The FCA nevertheless expects listed issuers to put in place contingency plans to minimise the impact of any delay in producing accounts caused by coronavirus and “to make every effort to meet their disclosure obligations in a timely fashion.” The FCA does, however, recognise that “there may be slight delays as new processes are put in place.”
The London Stock Exchange has stated that, until further notice, AIM companies with financial year ends between 30 September 2019 and 30 June 2020 may apply for a three month extension to the deadline for publishing their annual audited accounts. Any such extension request must be made to AIM by the nomad prior to the existing six month deadline. Read the statement here.
Separately, with effect from 25 March, private and public companies have been able to apply for a three month extension to file their accounts at Companies House.
Share issuances
The Pre-Emption Group (PEG) has issued a statement recommending that investors consider supporting issuances by companies of up to 20% of their issued share capital, which is a significant increase on the PEG’s usual recommendation of 5% for general purposes, and another 5% for specified investments.
Such issues should not be undertaken without prior consultation of a representative group of shareholders, if this is possible in the circumstances.
For more information, please contact Victoria Younghusband or Nathan Lightman.