Cumax Wealth Management Limited will provide advisory services to American company Music Licensing Inc on its path towards a cross-listing on the Jamaica Stock Exchange by July.
Music Licensing is a small music rights firm with a big catalogue. It wants to cross-list as a means of entering the local publishing space by leveraging its listed capital to raise debt to fund acquisitions.
“We saw it as an opportunity for the benefit of Jamaican artistes,” said Cumax CEO Ian McNaughton, when asked about the value of the listing.
The shares will be listed by introduction, meaning there will be no attempt to raise capital and therefore no offer to sell the shares to Jamaican investors prior to entry. However, the shares will be available for local investors to trade via the JSE.
It will be the second music company to enter the local stock market, the first of which was a start-up music publishing business called C2W that failed. It was eventually taken over as a shell operation and remade into a venture capital firm.
Music Licensing’s shares trade under the ticker symbol SONG on the over-the-counter market in the United States.
It is the first listing to be arranged by Cumax since receiving its broker licence from the JSE, and will become the third overseas cross-listed stock, the others being insurance group Guardian Holdings and conglomerate Massy Holdings, both based in Trinidad & Tobago.
McNaughton said more details regarding the listing would be provided at a later date.
Under the agreement, Cumax will provide advisory services to the company for a period of nine months, with an option to extend the agreement by mutual consent.
“We have recently undergone strategic revisions in our plans and are now working steadfastly towards our target listing date, which we anticipate to occur on or before the end of July,” Music Licensing CEO Jake Noch told the Financial Gleaner. “This notable progression represents a significant milestone in our company’s journey,” he said.
Noch also heads the affiliated ProMusicRights, which holds a large intellectual property, or IP, catalogue. ProMusicRights manages some 2.5 million musical IPs in the company’s catalogue. The company protects the IP of the artistes in its catalogue, and pays them royalties. Rights entities usually earn royalties by charging fees to radio stations and online sites. In turn, rights firms also earn a fee from the royalties they pay out.
The company is one of a handful of music rights bodies; some of the others being ASCAP, BMI and SESAC. Music Licensing says it represents works from artistes such as A$AP Rocky, Wiz Khalifa, Pharrell, Young Jeezy, Juelz Santana, Lil Yachty, MoneyBaggYo, Larry June, Soulja Boy, Lex Luger, Lud Foe, Young Scooter, Nipsey Hussle, Famous Dex, and Fall Out Boy. The company adds that it also represents the rights of music created by artificial intelligence.
Previously, Noch told the Financial Gleaner that Music Licensing Inc would consider setting up operations in Jamaica, but noted that its market entry might be easy to pull off.