JSE-listed Pinnacle Technology Holdings is set to launch over-the-counter stock in the US, through a New York-based bank, to expose its shares to a wider investor base.
The distributor, which has market capitalisation of about R2.7 billion in SA, says the American Depository Receipts (ADRs), level one, programme will become effective from next Monday.
CFO Chris Smyth explains that the Bank of New York Mellon will issue papers to US investors, which will be backed by JSE shares with a 10:1 ratio. The New York bank will buy shares on the open market, as dictated by demand, and there will not be a new issue of stock nor will Pinnacle have a listing on a US market, he says.
Historically, companies that have taken part in ADR programmes have seen their shares exposed to the US investor base, which has driven up the price of the local stock as demand increases. In addition, the increased exposure also improves brand recognition, which buoys commercial aspects.
“Pinnacle is pleased to be launching this programme, which will position Pinnacle shares in the larger US markets with their wider range of investors. It will also broaden the international exposure, not only of our securities, but also our business operations, which should enhance our image with international business partners,” says CEO Arnold Fourie.
Pinnacle expects headline earnings per share to improve to between 170c and 177c a share in the year to June, a 45% to 50% gain on the last financial year. Earnings per share should come in at between 168c and 175c for the year, an increase of between 39% and 45% over the 121c reported last year.
Share
