The Netherlands: Alternext Amsterdam – an attractive alternative?

20 August 2007

Bas van Bentum, Rik Wever

Most small and midsized companies attempt to obtain financing for their future growth and development by getting loans from financial institutions and private parties. However, it is sometimes unattractive or even impossible for these small and midsized companies to attain loans against fair conditions, for various reasons, such as an inability to provide sufficient collateral. As an alternative, such companies may attempt to acquire financing by making use of the flexibility of the capital markets.

In 2006, Euronext, following the great success of both AIM (Alternative Investment Market) in London and Alternext Paris and Brussels, launched Alternext Amsterdam, a Stock Exchange regulated market. The objective of Alternext Amsterdam is to form an alternative route for small and midsized companies that want to enter the capital markets under a lighter regulatory regime; i.e. without the extensive requirements regarding financial reporting, market abuse and corporate governance of a regulated market (gereglementeerde markt). Any company, regardless of its industrial sector or country, may request a listing on Alternext Amsterdam. The total of Alternext listed companies in Paris, Brussels and Amsterdam now amounts to 114.

The securities applying for listing on Alternext Amsterdam must be freely negotiable and transferable. Moreover, the company must present the financial statements of at least two years. The listing is contingent upon the securities being in public hands. This can be achieved in two ways:

  1. a public offer subscribed for at least €2.5 million (whereby a prospectus should be published); or

  2. a private placement of at least €5 million, made in the two preceding years, distributed amongst at least 5 qualified investors (as defined in the Dutch Act on the financial supervision (Wet op het financieel toezicht) which includes professional investors).

All companies seeking to be listed on Alternext Amsterdam must have, both during the preparation of the listing and throughout its listed life on Alternext Amsterdam, a listing sponsor. This listing sponsor is an audit firm, bank or corporate finance advisor which has been appointed by Euronext as an official Alternext listing sponsor. The listing sponsor helps the applicant to prepare for the admission to Alternext and will furthermore function as a long term financial partner that monitors and guides the listed company throughout its listed life.