G3 Group’s innovative capital raising offer, which went live today, was designed on legal advice from Chapman Tripp.
“G3 has become a bit of a trail blazer in New Zealand, being the first company to list on the new NXT market and now the first listed issuer to use an equity crowdfunding format,” said Chapman Tripp partner Roger Wallis, who led the legal team on the transaction.
“The deal structure also breaks new legal ground in that it involves the melding together of three legal frameworks: the Financial Markets Conduct Act ‘same class’ regime, the NXT market rules and the Snowball Effect marketplace.
“G3’s offer is not technically an equity crowdfunding offer because it does not rely on the equity crowdfunding regulations. But it does use the Snowball Effect client database as an efficient channel to reach a wide investor audience."
Not only is the offer mechanism innovative, so too is its execution as it does not use the normal broker networks, Wallis said.
“While listed companies have simpler regulatory requirements when offering securities due to ongoing disclosure, in this instance the offer is too niche for most NZX brokers. Snowball Effect was able to fill this gap by providing G3 with an alternative means to distribute its offer.
“This raise could potentially widen the investor base for G3 Group, as well as pave the way for other companies now listed on the NXT – Marlborough Wine Estates Group, Oceania Natural, and Snakk Media – to look at other options for raising funds in the future,” Wallis said.
“The scope for innovation made this an excellent offer to work on. Chapman Tripp is pleased that G3 trusted us with this opportunity.”