(BFM Bourse) – Transfers of companies listed on the regulated market of Euronext Paris to Euronext Growth have become commonplace. But the reverse is much rarer. Over the past nine years, only 3 Euronext Growth resident companies have asked to be transferred to the upper division. What is the stock market performance of these bold companies?
Last weekend, we devoted an article to the reasons that lead a company to move to a more modest compartment on the Paris Stock Exchange Since 2009, companies listed on a regulated market can indeed apply for the admission of their shares trading on Euronext Growth.
If this exodus towards this compartment was still confidential in recent years – since only 4 companies tried the experiment in 2018 – the phenomenon gained momentum from 2020. Since the beginning of the year, more than ten of listed companies have chosen to leave the regulated market of Euronext Paris for Euronext Growth and its relaxed rules.
But is the reverse possible? The answer is yes. A company listed on Euronext Growth can play in the big leagues by requesting a transfer to the regulated compartment of Euronext Paris. The cases are rare but they do exist. Over the past nine years, only three companies have achieved such a feat: Genfit in 2014, Figeac Aero in 2016 and Solutions 30 in 2020.
As a reminder, here are the different stock market compartments at Euronext from the most prestigious to the least important:
– Euronext compartment A: more than one billion euros in capitalization
– Euronext compartment B: from 150 million to 1 billion euros
– Euronext compartment C: less than 150 million euros
– Euronext Growth (lightened criteria)
– Euronext Access+ (very light criteria)
– Euronext Access (free market)
Genfit, Figeac Aero and Solutions 30: a step-by-step climb
In April 2014, Genfit announced the transfer of its shares to compartment B of the regulated Euronext market in Paris. The biopharmaceutical company specializing in cardiometabolic diseases and associated disorders had been listed since December 2006 on Alternext of Euronext Paris, the ancestor of Euronext Growth.
“This transfer of listing to Compartment B of Nyse Euronext Paris should provide Genfit shares with enhanced visibility thanks to their inclusion in numerous benchmark indices. In addition, this new listing group should facilitate strengthening operations capital needed to accelerate the company’s development in 2014; some investors prefer the regulated Euronext market”, explained Jean-François Mouney, former Chairman of the Genfit Board of Directors.
The company took its first steps on Euronext Paris at a price of 21.15 euros before never recovering from its stock market sanction of May 12, 2020. The price of the biotechnology company had then experienced its worst session and fell collapsed by 65.71% after being forced to bury his project in NASH (the disease of soda). A fall even greater than that recorded by the title in March 2015 after an initial disappointment with its flagship molecule elafibranor (initially designated GFT-505).
The file is still evolving under 4 euros currently, the Lille biotech has paid the high price for the abandonment of its treatment project for NASH, a disease which reflects the damage of junk food to the liver.
In March 2016, it was around Figeac Aero that it flew to compartment B of Euronext Paris at a price of 21.50 euros per share. This transition from Alternext to the regulated compartment of Euronext Paris was an opportunity for the aeronautical equipment manufacturer to finance its development and deploy its business model internationally, particularly on the American continent.
But the Covid-19 pandemic has been there, hitting the entire aeronautics industry hard and dragging it into an unprecedented crisis. Including Figeac Aero, which was already in a weak position before Covid-19. After a significant drop in activity in 2020, the aeronautical subcontractor undertook a financial restructuring in addition to a review of its industrial strategy. The group has launched Route 25, its plan which should enable it to return to the path of growth by 2025. Figeac Aero’s efforts are starting to be visible on the stock market, the stock is currently trading at just over 5.20 euros after hitting a low of 2.42 euros in the fall of 2020.
After 4 years without transfer to the regulated compartment of Euronext Paris, Solutions 30 offered itself the luxury of joining compartment A of Euronext Paris on July 23, 2020, 15 years after its first listing on the Free Market – which did not was not yet calling Euronext Access at the time. The European leader in the installation of fiber and meters, entered Euronext Access in 2005 with a capitalization of 4.5 million euros, to be then valued at 56 million euros in 2009 during the transfer of its shares on Alternext now Euronext Growth. Eleven years later, Solutions 30 arrived on Compartment A of Euronext Paris with a market capitalization of 1.5 billion euros.
The company also wanted to materialize in the eyes of the general public its “rapid development, combining organic and external growth”. After a stock market honeymoon with its shareholders, Solutions 30 really began its descent into hell in December 2020 from its historic zenith at 19.85 euros. An anonymous report questioned the reliability of the accounts, as had been the case in 2019, and outright accused Solutions 30 of being linked to money laundering. The credibility of Solutions 30, which has always denied these accusations, has been tarnished, while the group’s activity is in parallel in full slowdown. And this is also reflected in the share price of Solutions 30. The title is in fourth position for the largest declines in the SBF 120 since the start of the year (-71.73%).
Orège and Voltalia: from Euronext Access to the regulated Euronext market
For their part, Orège and Voltalia took the elevator directly, leaving the stairwell to their counterparts mentioned above.
In June 2014, Voltalia joined compartment B of Euronext Paris without going through the intermediate compartment of the Alternext compartment. After an initial listing on the Free Market of Euronext Paris in May 2006, the producer of electricity based on renewable energies took advantage of its transfer to the regulated compartment to complete a major capital increase of nearly 120 million euros. This large-scale fundraising was then mainly intended to finance the construction of wind power plants in Brazil and France. Entering the big leagues at 8.60 euros, the company Voltalia has since been on the rise with a title multiplied by almost two. The portfolio benefited from the acceleration in the growth of the renewable energy market against a backdrop of the energy crisis.
To stay in the race, the producer of renewable energies in the Mulliez galaxy raised nearly 500 million euros in mid-November to finance its development plan by 2027. By this deadline, the company hopes multiply by two its volume of projects in portfolio and by three its gross operating surplus.
In July 2013, Orège left the Marché Libre for compartment C of the regulated market of Euronext Paris. This transfer was an opportunity for the wastewater treatment specialist to raise around 20 million euros to extend its expertise to emerging markets (unconventional oil and gas) and strengthen its equity. Arrived at 3.24 euros on compartment C, Orège is now only 0.45 euros at its historic lows, erasing 90% of its value in the process. The company founded in 2005 has long struggled to market its technology on the French market, leading it to turn to the USA and Great Britain.
Apart from Voltalia, which is in a buoyant niche, moving to the next level is proving much more complicated for Orège, Figeac Aero, Solutions 30 and Genfit. A situation which is far from contradicting the third fable of Book I of La Fontaine’s Fables “the Frog who wants to be as big as an ox”.
Sabrina Sadgui – ©2022 BFM Bourse
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