CSE, SEC entice firms to go public
View(s):The Colombo Stock Exchange (CSE) along with the Securities and Exchange Commission is discussing with unlisted firms the potential to go public, officials said.
CSE Chairman Krishan Balendra, on the sidelines of launching CSE’s guide to the listing procedure to help prospective corporates who want to explore going public on Thursday, told the Business Times that a SEC and CSE joint committee has had discussions with many firms and some of it is looking positive. “We have met many privately held companies and had discussions with them.”
He said that they meet the managements of these firms and try to educate them on the benefits of going public. The financial gain in the form of raising capital is the most distinct advantage of a company going public. Capital can be used to fund research and development, fund capital expenditure or even used to pay off existing debt. Going public provides a company with equity financing opportunities to grow its business – from expansion of operations to acquisitions.
Another advantage is the public awareness of the company as initial public offering (IPO) often generates exposure by making their products known to a new group of potential customers.
The CSE saw 29 firms going public in 2011 and last year it was 17. Especially for smaller companies, the cost of complying with regulatory requirements can be very high but Mr. Balendra said the fees charged by the CSE to list was onlyRs. 150,000 and annual fees were only Rs. 50,000.
comments powered by Disqus