Why is Bahamas Petroleum Company seeking a Bahamas International Stock Exchange (BISX) Listing?
The Board of Bahamas Petroleum Company wishes for all Bahamians
to be able to invest in the future anticipated capital growth of
the Company and is therefore seeking a separate listing on BISX.
Currently, the Bahamian Exchange Control Regulations essentially
preclude Bahamian nationals from investing in and thus trading in
securities of a company whose shares are listed overseas,
denominated in a foreign currency and therefore attract significant
regulatory fees. The listing will be completed in the form of a
Bahamian Depository Receipt (BDR) in which Bahamian residents can
invest without these charges.
Why did Bahamas Petroleum Company choose to list on the London Stock Exchange in the first place?
Energy exploration carries with it geological risk. Thus
investment in exploration companies carries with it an additional
technical risk over and above those risks already inherent in the
investment of other Company shares. For energy exploration start-up
companies, as Bahamas Petroleum Company used to be, this requires a
further specific understanding of and appetite for these unique
types of stocks. In addition, the volume of capital Bahamas
Petroleum Company requires to undertake expensive and risky
exploration activity is large and therefore requires the kind
of deep, liquid pool of capital available from somewhere like the
London Stock Exchange. To date, Bahamas Petroleum Company has
raised in excess of $80 million to conduct its operations.
The Central Bank of The Bahamas and The Securities Commission of
The Bahamas have approved the creation of a type of security called
a Bahamian Depositary Receipt (BDR), denominated in Bahamian
dollars. A BDR permits Bahamian investors to acquire interests
in non-Bahamian securities without additional expenses.
Bahamas Petroleum Company deposits a number of its securities
(shares) with a Bahamian financial institution. That bank will then
issue Depository Receipts which entitle the holder to all of
the benefits of those shares deposited with the bank. The
BDRs are priced based on the value of the underlying shares on
their home exchange (i.e. for Bahamas Petroleum Company the London
Stock Exchange AIM Registry), however, it is not necessary for the
BDRs to have a one-to-one correspondence with their underlying
Why a BDR and how will it trade?
Given the anticipated size of the potential market and appetite
for Bahamas Petroleum Company stock, rather than issue new
shares it is cheaper, more flexible and faster to deal in BDRs,
which cause no dilution to existing shareholders of Bahamas
Petroleum Company, with the volume of securities created varied
directly based upon demand. The offer and issuance of Bahamas
Petroleum Company BDRs is dependent on permission from The
securities Commission and BISX. Once listed, BDRs trade through
local brokers just like the shares in other listed local
companies. Authorised Bahamian brokers-dealers may decide to
make a market for BDRs on BISX with the intention to enhance
What are the rights of BDR holders?
Holders of BDRs have substantially the same rights and benefits
as persons holding the underlying securities. For instance, if the
underlying securities carry voting rights, the holders of the
BDRs will retain the same voting rights.
Why now come to Bahamians to raise money and how much will be raised in the process?
Bahamas Petroleum Company is currently fully-funded for its
forward work programme, is not raising new capital from
Bahamian investors and therefore there is no capital target. The
pursuit of this listing is simply to afford Bahamians the
opportunity to invest in and financially benefit from any future
value growth in Bahamas Petroleum Company securities whilst sharing
in the ownership of the Company. All necessary capital to conduct
planned operations was raised through shareholders in London who
supplied the original seed and risk capital. Any Bahamian investors
who choose to buy into the Company BDR programme will benefit
from all past use of this risk capital.