The past few years have seen a growing number of companies incorporate in Bermuda and go on to list on the Oslo Stock Exchange. A key first step for some is listing on the exchange intended for small- and mid-cap companies: Euronext Growth Oslo. After that, some may migrate to a larger exchange such as the Euronext Expand Oslo or Oslo Børs and possibly go on to complete a dual listing in New York.
Two recent examples involving companies successfully taking this route are Himalaya Shipping Ltd. and Cool Company Ltd. In the first instance, Himalaya, which is primarily listed on Euronext Expand Oslo, completed a US$45 million IPO on the New York Stock Exchange (NYSE). In the second instance, Cool Company moved its primary listing to the NYSE after its IPO there, making Euronext Growth Oslo a secondary listing. Both companies commenced their listings in March 2023.
These examples demonstrate a potential path for companies looking to incorporate in Bermuda and list on Norwegian exchanges. In particular, the opportunity to raise capital through a quick admissions process on the Euronext Growth and subsequently uplist to a larger exchange is attractive to many industry players.
Companies Incorporating in Bermuda
Bermuda has long been the jurisdiction of choice for companies in the shipping and drilling sectors. In fact, its appeal has been such that Bermuda companies comprise a surprising 36% of the Oslo Børs Shipping Index, second only to Norwegian companies. This speaks to the historic ties between the two seafaring nations and Bermuda’s reputation as a well-established offshore international finance centre.
Further, companies beyond the core shipping and drilling sectors have been using Bermuda vehicles for some time to access high-quality capital efficiently. Those in the technology and real estate industries are finding Bermuda to be an ideal jurisdiction for Norwegian market activities — with renewables and alternative energy looking to follow suit.
The advantages of Bermuda include a robust regulatory framework that protects investor and creditor rights as well as a tax-neutral, business-friendly environment. Additionally, Bermuda is now among the few jurisdictions where companies can be seen as compliant with recent changes to the Norwegian Central Securities Depository Act (which incorporated into Norwegian law the European Union’s Central Securities Depository Regulation, or CSDR).
“Appointed Stock Exchange” Status
Bermuda companies have an advantage over companies incorporated in other jurisdictions as they have been able to continue listing on all three main Norwegian exchanges since the CSDR changes came into effect in 2022. Because Bermuda has given all Oslo exchanges “appointed stock exchange” status for the purposes of the Bermuda Companies Act, Bermuda companies are permitted to keep a branch register of shareholders outside of Bermuda. Through this method, they have avoided issues that other non-Norwegian issuers have faced after registration of shares through the single security link method was no longer permitted in Norway.
Since the CSDR changes took effect, the Sponsored Norwegian Depository Receipts (SNDRs) instrument was made available to Non-Norwegian issuers as an alternative to register or convert shares previously registered through the single security link method. SNDRs may be listed on one of the Oslo exchanges, the Norwegian over-the-counter market (NOTC) or held privately. Interestingly, despite the availability of SNDRs, Bermuda issuers are largely forgoing the NOTC market and going straight to the Euronext Growth Oslo to list.
In one example from November 2022, Conyers assisted Shelf Drilling (North Sea), Ltd. with its IPO on the Euronext Growth Oslo. The company had been domiciled previously in the Cayman Islands, which has not recognised the Euronext Growth Oslo as an approved exchange. As part of the preparation for and execution of the IPO, Conyers provided Bermuda law advice to Shelf Drilling North Sea on its continuance to Bermuda, the completion of its private placement of new shares in connection with its acquisition of five jack-up rigs and its admission to and listing on Euronext Growth Oslo.
Listing on the Euronext Growth Oslo has become a popular first step for companies incorporating in Bermuda and looking to raise capital on the Norwegian exchanges. Since Bermuda companies have the ability to list on all Oslo exchanges efficiently and effectively, it is expected that more companies will employ this route to growth, with a view to uplisting to larger exchanges in Oslo and possibly New York as their businesses develop.
At Conyers we have market-leading experience assisting many companies with listings on Norwegian and New York exchanges. We have advised public companies on the Bermuda law aspects of initial public offerings, secondary offerings, debt offerings, financing transactions, share repurchases and general corporate matters. We also have extensive experience advising on mergers and acquisitions involving Bermuda public companies.