Chronext, the Swiss platform for luxury watches founded in 2013 , strives to go public. It is planned to list the shares on the SIX Swiss Exchange in Switzerland in the International Reporting Standard. New shares from a capital increase are to be issued and existing shares held by certain shareholders shall be placed. The shares shall be offered to private and institutional investors in Switzerland as well as institutional investors in certain other countries. Depending on the development of the stock markets, the IPO shall take place in the fourth quarter of 2021.
Capital Increase: 250mn CHF volume
The capital increase associated with the transaction is expected to have a volume of approximately 250 million Swiss francs. In addition, existing shares of certain shareholders shall be placed on the market. This approach is common, since on the one hand fresh liquid funds flow into the company and on the other hand existing shareholder (e.g. founders or previous investors) co-offer some of their shares, but at the same time remain with the company with and thus strengthen the confidence of investors.
Greenshoe Option and Lock-up Period
For this purpose, so called lock-up periods are typically set, within which shares may not be sold. In the Chronext case, it is envisaged that the company itself and the management, including the founders, will be subject to a lock-up period of 540 days, the members of the Board of Directors to a lock-up period of 360 days, the selling shareholders (except members of the Executive Board or the Board of Directors) to a lock-up period of 180 days and all other existing shareholders to a lock-up period of 60 days. In addition, in the case of Chronext, a so-called “Greenshoe Option” applies to the selling shareholders: they offer up to 15 percent of their shares during the IPO process for possible over-allotment. This shall help stabilize the share price in the period after the IPO, if needed.
Use of Funds: Organic Growth and Acquisitions
The financial resources from the Chronext IPO shall be used as follows:
– Organic growth (i.e. expansion and development of own business activities without acquisitions) by expanding the product range and expanding into new regions. Funds will also be invested in new”pick-up lounges” and in the company’s technology, in particular to better integrate with retailers and brands, to further develop a mobile application, as well as to build a technology needed to introduce additional products and services.
– Acquisition of companies mainly in the core markets as well as in the USA and Asia.
– Increase in net working capital and reduction of debt.
The IPO is also intended to increase brand awareness, credibility, trust in and the profile of Chronext. The company also strives for greater financial flexibility, which will offer direct access to the capital markets – specifically: once public, further equity capital can be raised from investors in the future, for example through capital increases or convertible bonds.