There are multiple benefits for Callimbah Inc. to consider listing on the ASX: access to a large pool of capital for growth, availability to secondary market for Callimbah Inc. shares, more publicity for Callimbah Inc., improved valuation, greater efficiency, institutional investment, alignment if management commitment and reassurance for customers and suppliers.
By listing, there will be a greater media coverage of Callimbah Inc.’s activities, increased awareness of Callimbah Inc. and the possibility to be included in a share market index. An increased publicity means demand can increase for Callimbah Inc.’s shares and products; while there is a possibility of increased market share. Being listed means Callimbah Inc. becomes visible to institutional …show more content…
There are equity and debt sources of funds. To raise additional funds through equity, Callimbah Inc. can issue placements. Share placements are additional ordinary shares issued to particular group of investors. Due to a prospectus not being required, this allows for a smaller discount, shorter time frame than rights issue and is cheaper than debt due to unrequired interest payments or dividends. However share placements can dilute the shareholder ratio.
Debts are loans that must be repaid including: debentures, unsecured notes, term loans, commercial bills, promissory notes, overdrafts and mortgage loans. Term loans, mortgages and overdrafts are provided by financial institutions. Debentures and unsecured notes are long term debts and are issued into the capital market. Debentures are listed and traded on the Australian Stock Exchange. They have a fixed or floating charge over the issuer’s assets and the lender receives regular interest payments and repayment at the face value at maturity. There are three principle issue methods: public, family and private- Private is faster to raise funds as it does not require prospectus. Debentures will allow Callimbah Inc. to raise their funds for a new building, in the short term but allows for repayment of the debt in the long