Dragon Oil (LON:DGO) have today announced that they will not go through with their corporate restructuring plans and have decided instead to stick with their current status of being fully listed on both the Irish and London stock exchanges. They have said that this decision was made:
‘following an extensive review of the options for, and implications of, a corporate restructuring together with a period of shareholder consultation’
It is hard to say how much of this decision came solely from ENOC via their 52% holding, and how much came from the other investors, but judging from the reactions on the numerous Dragon Oil discussion boards this decision has not been very welcome.
In terms of what this decision means for Dragon, due to the changes in the listing regulations on the UK markets, from 6th April Dragon Oil will now be designated to have a Premium Listing. What this means is:
‘A Premium Listing is only available to equity shares issued by trading companies and closed and open-ended investment entities. Issuers with a Premium Listing are required to meet the UK’s super-equivalent rules which are higher than the EU minimum requirements. A Premium Listing means the company is expected to meet the UK’s highest standards of regulation and corporate governance – and as a consequence may enjoy a lower cost of capital through greater transparency and through building investor confidence.’ (from the London Stock Exchange)
In terms of what has changed using a quote from the London Stock Exchange:
‘The principal being made is to reclassify the existing listing regime into new categories of listing comprising of “premium” and “standard” listed companies. The new classifications will replace the current categories of “primary listings” and “secondary listings”.’
In terms of what the Standard Listing option is, again using a quote from the London Stock Exchange:
‘Standard Listings cover issuance of shares, Global Depositary Receipts (GDRs), debt and securitised derivatives that are required to comply with EU minimum requirements. A Standard Listing allows issuers to access the Main Market by meeting EU harmonised standards only rather than the UK ‘super-equivalent’ requirements.’
In terms of what this regulation change means…
