May 2012 Financial News

C2W Music IPO clears $129-m

May 18, 2012

C2W's initial public offering (IPO) attracted just over the $129 million the intellectual property start-up company hoped to raise.

The IPO had two and a half per cent oversubscription for the 100 million ordinary shares that were made available at $1.29 each.

Over 100 applications were received for the shares, which were offered up three weeks ago, according to a release sent by the company's broker, Stocks and Securities.

The IPO closed yesterday afternoon. Applicants will be advised on the allotment of shares by next Tuesday, as required by the Junior Market, the release said.

The success of the offering is significant, said Stocks and Securities.

“This represents a landmark event for Jamaica's first start-up intellectual property company to seek admission to the Jamaica Stock Exchange's (JSE) Junior Market.”

Companies that list on the Junior Market pay no taxes for five years as a result of its listing and 50 per cent for the next five years.

It's a virtual company operating without permanent offices or equipment except computers, printers and other such devices.

Earnings will be based on royalties collected from deals made with Caribbean songwriters that allow C2W to commercialise the rights to songs they create during the contract period.

Songwriting is big business, according to Rolling Stone magazine which said the pop culture hit Love The Way You Lie earned US$865,000 ($76 million) for cowriters Eminem and a then unknown, Skler Grey.

Recorded music and live performances will be the main sources of royalties collected.

Funds earned from the IPO will be used to market songs, sign more writers and repay loans, which amounted to $3.5 million at the end of 2011, states the company's prospectus.

Also, the company is expected to make $58 million next year, increasing to $206 million in 2016, the same document said.

C2W is currently conducting a songwriting workshop in Nevis with the help of Columbia Records, an international record label.

That workshop is the fourth and ends next Wednesday, with another scheduled in Jamaica for next month. Similar workshops are to be held throughout the year.


Source:
BY PAUL ALLEN Business reporter
allenp@jamaicaobserver.com
Jamaica Observer
Friday May 18, 2012

http://www.jamaicaobserver.com/business/C2W-Music-IPO-clears--129-m#ixzz1vE14DhXo