After coughing and spluttering for months, AIM’s IPO procession came close to a halt in August, with just one new arrival – and that was a migration from the Full List

Unsurprisingly, a number of mooted moves have been aborted. Seymour Pierce’s attempted tilt at a $120 million placing in August for New York-headquartered Global Real Estate Services failed to attract support. Another potential float to have been pulled, perhaps only temporarily, as it was originally attempted in June and then again in July, was nomad Ambrian and broker Mirabaud’s £15 million plans for Liberian plantation group Equatorial Palm Oil.

That numbers have picked up again slightly in September is still something of a curate’s egg. Only three ventures have joined the junior market in the month (one a transfer from the full list), making it in line to be the lowest monthly total since February 2003, when AIM was at its lowest post-dotcom-bubble ebb. However, two new ventures that have joined are excellent in parts. 

Green spin on Africa
The first to arrive was the newest delivery from often-controversial former Test cricketer Phil Edmonds. Known equally for his leadership of African exploration counters CAMEC and White Nile and his entrepreneurial bent, Edmonds has veered off his usual beaten track by launching BioEnergy Africa.

Designed to soak up the growing demand for biofuel, the company will grow sugarcane to use as a feedstock from which to produce ethanol fuel. Citing southern Africa as having ‘the potential to be one of the most cost effective regions for sugar cane production’, Edmonds stresses biofuels’ increasing charms on the back of ‘increasing fossil fuel prices, geopolitical instability… and global warming’.

BioEnergy, which raised £7.3 million through pre-IPO funding earlier this year and a further £8.6 million at float, has secured ‘green-field land and abandoned small holder agricultural land’ in Mozambique, where it intends to plant 24,500 hectares of sugarcane and build an electricity plant and associated infrastructure. Already underway, the company is targeting an initial production of 600,000 litres of ethanol a day.

Edmonds aims to position BioEnergy ‘as a leading developer of bio-energy projects in Africa’, with ‘a strong sustainable policy that ensures ecological development is maintained in tandem with creating employment for local communities’.

However, economists and environmentalists are concerned about the negative effects of biofuels and its carbon reduction effects have been seriously questioned. Previous mandates in America to increase the amount of crop-based fuels have been key in causing food and raw materials costs to rise sharply in the last year or so, it is argued, and the land used might be otherwise used to grow food.

It is likely therefore that shares in BioEnergy Africa, up from a 12.5p issue price to 14p per share, will enjoy an energetic ride.

Malays to beat the malaise
You have to admire the gumption of a small cap media company that, even in light of poor sentiment from investors, chooses to IPO on an index trading at its lowest level for five years. Advertising broker RedHot Media International is that company. Based in Malaysia and incorporated in the Cayman Islands, RedHot’s directors believe its approach – of buying advertising space on behalf of clients and earning commission from media providers based on the amount of advertising purchased – is more profitable for a company of its size than the usual sector model.

Planning to expand this model, which it claims has the potential to offset any reduction in advertising expenditure as manufacturers will be able to pay for advertising with inventory, into the rest of Asia, the company listed on AIM without raising any funds. However, it anticipates using its equity in future for potential deals. Highly speculative.