Investor interest growing in AIM – Cobbetts
INVESTOR interest in AIM listed companies is growing with renewed interest in the first quarter of this year, law firm Cobbetts has said.
The firm, which has offices in Birmingham, said it has seen an increase in the number of businesses seeking to raise capital on the London markets, after advising on seven AIM transactions during the first quarter of 2010 and helping clients to raise more than £75m.
It said throughout the economic downturn, the cost of maintaining a quotation on AIM, combined with depressed company valuations and a notable lack of investor appetite, saw rising numbers of businesses leaving the market, with 274 companies delisting in 2009 – up from 216 in 2008.
However, the number of companies delisting from AIM declined significantly in the first three months of this year, with just 44 leaving the market compared to 73 between January and March last year.
Additionally, 16 companies were admitted to the market in the first quarter of this year, compared to just five in the same period of 2009.
The public markets team at Cobbetts has had its fair share of the action, acting on various new admissions.
It has advised Yorkshire-based healthcare IT specialist, EMIS Group, on its admission to AIM and a £50m fundraising, giving it a market capitalisation on admission of £175m.
It has also advised Shore Capital and Mirabaud Securities, nominated adviser and broker respectively to the crude palm oil producer Equatorial Palm Oil, on the company’s admission to AIM and a £6.5m fundraising.
Advice was also given to diamond exploration and production company, Stellar Diamonds, on its reverse takeover of West African Diamonds, a £5m fundraising and readmission to AIM as Stellar Diamonds – one of only a handful of resources quotations on AIM in the last two years.
Cobbetts also advised on four secondary issues in the period, acting for emerging diamond producer, Diamondcorp, on its £7.1m fundraising; advising gold exploration and development company, Ariana Resources, on a £1m fundraising; acting for gold mining business, Peninsular Gold, on placings raising £5m; and advising Infoserve Group on a further investment by its major shareholder and associated City Code circular.
Charles Bond, corporate partner at Cobbetts in Birmingham, said: “While AIM saw a notable downturn in admissions throughout 2009, the outlook for 2010 and beyond is considerably more positive.
“Company valuations are slowly improving, investor appetite for new issues is growing, and chief executives are more optimistic about their ability to raise funds.”
He said as 2010 progresses, the firm expected this optimism to manifest itself in a number of new admissions and funds raised on the market.
“Cobbetts’ recent AIM transactions serve to reinforce both the strength of the market as a platform for ambitious domestic and international companies seeking to raise funds for growth, and our position as one of the leading legal advisers to companies on AIM,” added Mr Bond.
He said after a tumultuous couple of years, it was extremely positive to see AIM being reconsidered by businesses not only as a source of funding, but as a route to build their profiles in the City, gain access to institutional investors, and boost their credibility.
