Half the companies open to new investors

BSEC survey finds 33 percent of firms
do not want to open up their capital at all

Forty-eight percent of local companies, mainly family-owned businesses in the startup, early growth, or expansion phases, are willing to allow in new investors, a survey prepared by BEMO Securitization (BSEC) found.

The survey results were presented by the Lebanese Businessmen's Association (RDCL) at a seminar on financing tools for local companies, mainly preferred shares, ahead of an expected amendment to the law in this regard.

The RDCL is involved in meetings held by the parliamentary subcommittee tasked with studying amendments to the Lebanese Code of Commerce, mainly those related to regulating financing tools for private firms.

Around 20 percent of companies are not willing to allow in new investors, the survey found. These companies are interested in raising their capital but do not wish to share the decision making authority.

The survey showed that 33 percent of companies do not want to open their capital regardless of the type of shares. These companies mainly comprise large family-owned businesses which have enough financial resources, as well as easy access to funding.

Fouad Zmokhol, president of the RDCL said preferred shares widen financing alternatives for companies, and offer investors higher yields, with the advantage of separating funds and decision making authority. “They allow companies to raise their capitals without having to concede voting rights,” he said.

According to the Code of Commerce, only banks can issue preferred shares. The amendments proposed include allowing private companies to issue preferred shares too.