Cobbetts says AIM market is on the up after seven instructions in three months
The public markets team at law firm Cobbetts has seen an increase in the number of businesses seeking to raise capital on the London markets, after advising on seven AIM transactions announced in the first quarter of 2010 and helping clients to raise more than £75m.
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 2010, 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, maintaining its position as one of the leading AIM legal advisers and acting on various new admissions: advising Yorkshire-based healthcare IT specialist, EMIS Group, on its admission to AIM and £50m fundraising, giving it a market capitalisation on admission of £175m; advising 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 £6.5m fundraising; and advising diamond exploration and production company, Stellar Diamonds, on its reverse takeover of West African Diamonds, £5m fundraising and readmission to AIM as Stellar Diamonds plc – 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 plc, 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. As 2010 progresses, we expect 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. After a tumultuous couple of years, it is 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.”
These recent transactions come just weeks after Cobbetts announced its entry into the Middle East and North Africa (MENA), in response to strong demand for its services from the locality. The launch of Cobbetts International Cairo followed Cobbetts’ corporate team winning a significant mandate in the MENA region, building on its position as the leading legal adviser to basic materials companies on AIM.