'Raise capital, not debt'

'Raise capital, not debt'

BY SHAMILLE SCOTT Business reporter scotts@jamaicaobserver.com

Wednesday, January 30, 2013

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COMPANIES should focus more on seeking capital rather than loans to grow their businesses, according to Christopher Williams, president of Proven Management Limited.

"Businesses globally are driven by capital structure that doesn't depend totally on intermediaries (banks)," said Williams. "They don't just grow their businesses on bank financing."

"You can't have a banker and not a broker," he said. "A broker is an investment banker who can work with you to identify capital sources."

He called on more businesses to list on the Jamaica Stock Exchange at the Jamaica Stock Exchange Investment and Capital Markets Conference held last week.

"It's not by coincidence that the most successful firms are the ones listed on the Jamaica Stock Exchange," Williams said.

Williams said that private placements can keep down the cost of raising capital.

"Having raised that fund privately, move to list," he said. "Allowing you to not absorb the high listing cost of immediately going public."

"We need to see more bond issues. We need the market to find their brokers, and use the bond markets going to get the restructuring of businesses," he said.

According to Williams, there have been successes over the last few years for companies that establish a private equity portfolio.

Meeting the moment, and acting quickly to make money and become profitable means a focus on export-led growth, Williams reckons.

The size of the enterprise shouldn't be an issue.

"Every private-sector company should align a greater percentage of their spend on growth that can come as a result of selling outside of Jamaica."

Establish a strategy to grow sales, to satisfy the demand of the market for the export market, Proven's president said.

Though Williams acknowledged that there have been improvements in the output of the region, within the context of Jamaica, the Government is faced with high debt, high unemployment.

"We are in a very tight spot," he said. "We are confronted with an immediate decision that we must meet."

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