Unlisted plans first IPO by Christmas

Unregistered share trading company Unlisted hopes to host its first initial public offer before Christmas.

Manager Bruce Cossill said Unlisted was in talks with a potential issuer of $1 million to $2 million of shares.

He declined to give details but said there was likely to be a stepped process, with a private capital raising by the interested party, then the issue of a prospectus and a public capital raising.

While IPOs are commonly associated with regulated, registered stock exchanges, Cossill said there was nothing to stop a company making an initial public offer through Unlisted.

"The only difference is they have to provide their own support. The NZX provides a range of support for that [an IPO] to occur."

Because of that DIY aspect, Unlisted would not charge for an IPO, though new issuers would incur professional advice costs.

Unlisted, half-owned by the Marketplace Company, M-co, and 50 per cent by financial and investment market players, launched in 2003 as a cost-effective share trading facility for small and medium companies to step up to bigger, registered, stock markets.

After two years of losses, it is expected to break even for the 2005-06 year, according to unaudited management accounts. Unlisted posted an after tax loss of $225,000 for 2004-05, a significantly bigger loss than expected largely because of direct and indirect costs from last year's regulatory review. (The first-year loss was $300,000.)

The low fee, low maintenance share trading facility survived the review, which could have seen full market disclosure rules imposed on it, and is about to lift its profile in the investment community with presentations in Wellington and Auckland over the next two months.

Cossill said Unlisted was offering two new services, a "private market" trading facility and a temporary quotation service.

The private market offer is aimed at companies not ready to commit to a public securities quotation and trading, or which have restrictions on stock ownership. Unlisted technology allowed a company's quotation to be private to existing shareholders, Cossill said.

The temporary quotation service allows companies to periodically trade shares.

Unlisted currently quotes 24 securities from 21 companies, with an aggregate market capitalisation of around $940 million.

Cossill said it aimed to have 60 to 100 issuers within five years.

In the year to April there were 1691 trades of 20.7 million shares at a value of nearly $20 million.

Unlisted has 11 brokers. It charges a flat fee of $10,000 a year.