Small Talk: Ofex extends a warm welcome to cash shells

Ofex changed the rules a few weeks ago to pick up shells no longer welcome on AIM
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Where will all the cash shells go? The decision by the London Stock Exchange to ban the smallest of these speculative companies from the fast-growing AIM market has left rival stock markets with a golden opportunity to attract new members.

Where will all the cash shells go? The decision by the London Stock Exchange to ban the smallest of these speculative companies from the fast-growing AIM market has left rival stock markets with a golden opportunity to attract new members.

And today, Ofex, the self-regulated fringe market, is announcing news of the first "Ofex Investment Vehicle" to join the market under its new, welcoming regime. JGP Investments has been set up as a cash shell company to acquire businesses in the UK's entertainment and leisure industries.

Although the company says it has identified a number of potential targets, nothing has yet been signed, so JGP's potential investors are being asked to back the judgement of its managers.

Who are they? The executive chairman is Jon Pither, now 70, whose business record includes the creation over 20 years of Amari, an international group of engineering companies that was eventually taken over by Glynwed International.

Since then, he has made mixed forays into the leisure industries. As chairman of Ultimate Leisure from its flotation in 1999 until last year, he steered the North of England clubs and bars company through an expansion plan that tripled its number of venues and doubled the share price.

But he was also chairman of Lady In Leisure, the women-only health clubs chain which went into administration in 2001.

As a non-executive director of St Helen's Capital, the finance house behind many Ofex fund raisings of the past year, Mr Pither ought to have access to some significant acquisition opportunities. At JGP, he is joined by Martin Groák, the only other director. Mr Groák is a chartered accountant whose other work includes being an independent director of the AIM venture capital trust.

Ofex changed the rules a few weeks back specifically to pick up those cash shells that were no longer welcome on AIM. There are no minimum funding requirements, no explicit demands for deals to be done within a specific timeframe, only an over-arching demand that companies act transparently and provide investors with timely information. Cash shells (to be known as Ofex Investment Vehicles), like all companies, will be judged against these principles by a regulatory team at Ofex that can chuck them off the market if they are undermining its reputation.

JGP says it is looking to buy only "fully developed" companies which are "profitable or have significant asset values". It plans to raise just £500,000 with a share offer at 2p per share (the minimum for admission to AIM is £3m) and says that future acquisitions will be made mainly in shares. Unsurprisingly, it is St Helen's Capital which is organising the fund raising and, if it is successful, JGP shares should start trading on 12 May.

AIM's newest recruiter

Luke Johnson, the serial entrepreneur and chairman of Channel 4, is backing a new company coming to AIM. He is a founder shareholder of InterQuest, an IT recruitment firm which plans to raise £5m and list with a market value of about £20m.

IT recruitment has rebounded strongly over the past year. InterQuest has four main divisions - spanning IT contracting, permanent staff and search and selection - and clients include financial giants such as Fidelity and JP Morgan, retailers including John Lewis, and local councils and government departments such as the office of the Deputy Prime Minister.

Resources, naturally

And still no sign of a slowdown in the number of flotations in the natural resources sector. With oil and other commodities prices still sky-high, it will take more than last week's bout of nervousness to turn off the funding taps for new ventures coming to AIM.

India's first platinum mine is being planned by the Platinum Mining Corporation of India (whose headquarters are, incongruously, in Poole, Dorset). The company has 70 per cent of a joint venture with a local company to exploit a platinum deposit in the north-eastern state of Orissa. Until now, the area has only been mined for chromite and the waste left over from earlier projects, which could contain significant quantities of platinum, ought to give a head start to the new mine. Platinum Mining Corp is raising £14m at 22p per share, and trading starts tomorrow.

Also trading for the first time this week, South China Resources, which has raised £3m to explore for metals inside the industrialising Asian powerhouse. Its first project is a copper project in the Shaanxi province where there has been mining since the Tang dynasty in AD618.

ADD finally

ADDleisure has maiden results due today. The company's fitbug.co.uk website offers an online personal coach to give fitness advice. As well as experimenting with new content for the website, it has been expanding into motivational text messages. And now, Small Talk hears, the company has attracted interest from partners in the fitness industry who want to explore offering fitbug services to their customers.

Greek ships float on rising tide of demand

China's industrial revolution has led to a surge in the cost of transporting goods to and from the country and, indeed, around the world. The cost of chartering ships, in particular, has rocketed and small company investors in the UK have profited from stakes in Braemar Seascope and Clarkson, quoted shipping brokers.

Now, they will also be able to invest in a ship owner, because a Greek company called Global Oceanic Carriers plans to float on AIM. GO Carriers plans to buy a fleet of five ships and has already put down a deposit on the first three. Its drybulk ships will be able to carry large volumes of material that can be stored in a single hold, including iron ore, coal and grain.

It plans to raise £43m from the issue of new shares, making it the biggest AIM fund raising of the year so far. The company will have a market value of £62m.

Vassilis Vintiadis, the chief executive, is the founder and owner of Niva Shipping, a 27-year-old shipping company. He said: "We are excited about offering investors an opportunity to access a well-established and buoyant market."

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