Entrepreneurs turn their backs on AIM

Under the current market conditions, entrepreneurs are finding the cost of being listed on AIM far outweighs the benefits. Not only are fewer companies joining the market but unprecedented numbers are delisting.

AIM’s brokers are having to work increasingly hard to find investors; which is being reflected in fees. The cost of maintaining an AIM listing is around £150,000 a year, with some companies shelling out up to £250,000 a year.

One of the most attractive alternatives to the senior markets is a multilateral trading facility – a market mechanism which can ease access to capital for small and medium-sized enterprises through new share, bond and rights issues.

Ideal for companies whose shares are traded infrequently, multilateral trading facilities can offer an exit route to existing shareholders, including employees. They can provide an internal market, as well as assistance with valuing the company for taxation or estate valuation purposes.

Relatively low admission fees and inexpensive ongoing costs mean it’s possible for some companies to save up to £145,000 a year by delisting from AIM and trading on a multilateral trading facility.

Sophie Douglas is the manager of Sharemark.

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