By listing on the BSX, or "going public" through an initial public offering (IPO), companies can gain access to the capital required to grow their business without bank borrowing. Going public also allows families which own their own businesses to diversify their holdings and assists in estate planning - stamp duties are not paid on sale transactions involving BSX-listed securities.
This initiative is part of a five year plan implemented by the BSX in 1995 to internationalize the Exchange and increase its base of domestic listings. Domestic listings are divided into Main Board companies (with market capitalization over $10 million) and Small Capitalization Stocks.
"The BSX is excited about launching this initiative," said BSX Development Manager Mr. Stephen Davidson. "There are a number of successful local companies which can benefit further from listing on the BSX. For many of these companies, going public is the next logical step in their continued growth. This allows them to remain competitive in a marketplace which has changed dramatically in the past two years."
The "small cap" listing category of The BSX is designed specifically for small but growing businesses with total market capitalization as low as $500,000. Many of the Island's household names trade on the BSX Small Cap Board, including Kentucky Fried Chicken Ltd., Masters Ltd., SAL Ltd., Bermuda Aviation Services Ltd. and Watlington Waterworks.
The Exchange plans to hold a seminar ,"Going Public on the BSX", later this year to educate the Island's smaller companies on the benefits of listing and how to go about it.
The benefits of taking a small company public are:
· Access to additional capital and equity capital does not carry interest payments
· Better financing options in the future
· Enhanced company regulation
· Shareholders increase their liquidity
· Enhanced employee compensation incentives (share option plan)
Companies which list on the BSX benefit from the Exchange's wide information dissemination network.
There are five main steps to taking a company public:
· Develop and maintain a business plan which outlines the company's strengths, weaknesses and key differentiators: act like a public company
· Build relationships with legal and accounting advisors
· Contact the BSX to determine suitability for listing and decide size of IPO and number of shares to be issued
· Select a listing sponsor from the list of approved BSX Trading Members
· Prepare draft prospectus for approval and complete listing application for BSX review
For additional information, please contact Stephen Davidson, Tel: 441-292-7212 or e-mail sdavidson