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Investment
The route to the Capital Markets for small companies
with a wider set of stakeholders including investors, advisers, analysts and the media. l Increased capital. When growth can no longer be financed internally, from private equity investors or through borrowings, an IPO can provide your company with addition- al funds to meet working capital needs, acquire other businesses, expand research and development efforts, invest in facilities and equipment, or retire existing debt.
l Less dilution. If your company is at the stage where it is ready to go public, you may command a higher price for your securities through an IPO than through a private placement or other form of equity financing. This means that you give up less of your com- pany to receive the same amount of funding. l Enhanced corporate governance. Going public requires the company to adopt internal and external reporting procedures, implement monitoring systems and controls and increase management accountability. This in turn, enhances corporate discipline and makes the company operate in a more orderly, accountable and structured manner.
l Liquidity and valuation. Once your company goes public, a market will be
By Eran Shay, Managing Director, Benefit Business Solutions Ltd
In November, a delegation from the London Stock Exchange visited the Rock for the first time, as part of a Capital
Markets conference organised by the Gibraltar-Israel Chamber of Commerce. One of the key messages delivered by the directors of the London Stock Exchange has been that Gibraltar companies should consider the Exchange, and particularly the AIM market, as a viable route to raising capital. Indeed, they have reiterated that the AIM market is specifically designed to accommodate young, growing companies and the listing requirements are far less onerous than those for a Main Market listing. Indeed, AIM’s success is underpinned by its regulatory environment, which has been specifically designed to meet the needs of smaller and growing companies while offering
appropriate investor protection. The AIM market also benefits from being an integral part of the portfolio of markets offered by the London Stock Exchange. The entry criteria for AIM Stock Market are tailored for growing companies with no trading record required, no minimum size criteria and there is no prescribed level of shares to be in public hands. AIM’s balanced regulatory environment is specifically tailored to support the needs of smaller companies. Moreover, the AIM market is open to companies from a wide range of industry sectors, as shown by the diagram opposite.
The Advantages
Going public potentially provides both tangible and intangible benefits, including: l Visibility and profile. Admission to the stock exchange provides international visibility and credibility for companies not only with their customers and suppliers but
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Gibraltar International
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