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Smiths City leads a First 15 set to launch

By Chris Hutching

Friday 12th September 2003

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Christchurch retailer Smiths City Group will lead 15 small and medium-sized companies tipped to trade on to the New Zealand Exchange's new AX market from November 14.

NZX's marketing and communications staff have already made extensive preparations for the official launch in Wellington on November 12. Others already named or suggested include spirits company 42 Below, Stirling Sports, Turners & Growers and Feltex Carpets.

The launch is the culmination of 12 months of negotiation with the Securities Commission aimed at providing an alternative regulated trading exchange for smaller companies that may eventually migrate to the main board.

The AX will replace the existing secondary board where about 60 small companies' shares are traded on software made available by the stock exchange.

This arrangement will end on the launch of the AX. Fees will be lower and regulatory requirements less onerous than for full board listing.

Smiths City chief executive Rick Hellings (46) said the AX would suit his company because it would facilitate trading for its several hundred shareholders but Smiths was a regional entity rather than a national company and costs would be lower.

Companies will also soon have a choice of using Unlisted, a new share trading system that will be largely unregulated and therefore investors may need to do their homework.

It will be set up by M-co, former stock exchange chief executive Bill Foster and other investors, who include Skyline Enterprises' Barry Thomas, and former sharebrokers Brian Kreft and Rob Cameron.

Meanwhile, Smiths City obtained approval from its shareholders at its annual meeting this week where board members outlined challenges facing retailing.

Smiths' move back to a regulated share trading system marks a long journey in its rehabilitation from its 1991 receivership after a rapid period of expansion. The directors believed the receivership was driven by banks and was not in the interests of shareholders.

Former chairman Bill Revell spent many hours over several years providing his accounting services for free because he felt it was his duty to steer the company back to health.

During the period Mr Hellings and executive chairman Craig Boyce (55) built up their stake in the company to 30%.

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