Why should my company go public?
The main reason to go public is to raise finance either for the company or the shareholders of the company who want to sell their securities by way of a public offering. A public offering may be to raise equity or debt.
What are the benefits of going public?
1. Provides a secondary market for the trading of your company's securities.
2. Enhances the public image of the company.
3. Access to low cost capital.
4. Company is valued by the market in the case of equity offering.
5. Shares can be issued to employees as an incentive.
6. Company's products and services become known to the public.
Can my company "go public"?
Yes, if it is a public company. An ideal candidate for "going public" should have record of good earnings in the past. It should also have a promising future and a good management team.
What are the consequences of "going public"?
The company must comply with the Stock Exchange rules and the Securities Laws & Regulations. This means:
1. Regular financial reporting to shareholders.
2. Immediate disclosure of information that affects the price of securities.
3. Investors in the company's securities are subject to insider dealing laws.
4. The responsibilities of the directors become more onerous.
How do I take my company public?
A company that wants to go public will require some professional assistance and support. CMDA is at hand to help you. You may need help from the market professionals or Brokers on the following tasks:
1. Pricing of the securities.
2. Preparing the offer documents.
3. Marketing the issue of Securities.
4. Processing the application for securities and issue of certificates.
5. In the case of debt offering a credit rating or a guarantee for payment of interest and capital may be required.
What are the costs of a public offering of securities?
“Going Public” does have costs which will vary with each issue. The main expense areas are:
1. Investment Advisors Fees.
2. Professional Fees for accountants and lawyers.
3. Printing costs.
4. Promotion costs.
