Tuesday 22nd August 2017
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Bancorp Group has gained NZX accreditation, which will allow the investment bank to bring companies to market in dual listings that give local firms access to Australia's deeper pool of capital.
Bancorp Corporate Finance has been accredited as an NZX sponsor and NZX distribution and underwriting sponsor. Managing director Craig Brownie says his firm is currently working on a listing that is expected to come to market in the next six months. He declined to name the company.
The accreditation comes after a change in ownership at Bancorp, which was founded in 1987 and now offers merchant banking, private banking, aviation financing, and includes the German-listed Bancorp Wealth Management. Bancorp founders Paul Norling, Harry White and John Wells, the current chairman, have sold their holdings, mainly to the company's existing management team. Companies Office records show the company is now 95 percent owned by Brownie, David Young and Jillian Cory and 5 percent by Dean Sharrar, Simon Reichenbach and Stephanie Mercer.
Brownie says his firm will target listings in the range of $50 million to $100 million that take advantage of arrangements between the NZX and the ASX allowing smaller New Zealand firms to gain an ASX foreign exempt listing, provided they are listed on the NZX.
He says an NZX listing alone hasn't been do-able for an advisory firm like Bancorp which has tended to use brokerages to manage the IPO. "In recent years it has become clear that unless the listing is greater than $100 million you can't do it on the NZX," he said. Smaller listings are a tougher sell for brokerages because there's little liquidity outside the biggest firms on the NZX. That helps explain why there has been a run of Kiwi firms seeking a primary listing on the ASX recently, he said.
"The smaller the listing the harder it is to sell," he said. "Small companies like Fliway Group or Airworks - you will see there's barely any trading and they are not well supported. It's very hard for a retail broker to say to a client, you should buy some of those shares."
Fliway has 45 million shares on issue. Daily trading volumes on the NZX have ranged from zero to more than 80,000 in the past 12 months. Airwork Holdings has 52 million shares on issue and in recent weeks trading has seldom topped 10,000 shares.
Bancorp Wealth Management's interim report says its New Zealand business intends to list its shares on the ASX in 2017 to improve their liquidity. In a shareholder update on June 6, the company said it intended to begin a sale process and lodge a prospectus for the ASX listing of its Boston Marks aviation insurance broker business, once it had signed off on its 2018 forecasting.
Bancorp shareholders would receive either shares in Boston Marks by way of an in specie distribution or cash if the business was sold. Following a sale or IPO, it was likely the value and liquidity of the company's German shares would reduce. To provide greater liquidity for Bancorp shareholders, the company is also progressing an NZX/ASX listing of its remaining major business, Salus Aviation, it said.
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