PUBLIC OFFERINGS
A public offering is the process by which a company sells securities such as stocks or bonds to the general public to raise capital.
Public Offerings under the OHADA Law
Are deemed to trade securities publicly: - -
- Companies whose securities are admitted to trading at the stock exchange of a State party from the date of the admission of such securities;
- Companies or any person who offer its securities to the public of a State party under the conditions set out in article 83 hereafter.
When a financial market covers several States parties, these states shall be deemed as constituting a single State party for the purpose of this title.
Key Types of Public Offerings
Initial Public Offering (IPO): An Initial Public Offering (IPO) constitutes the first occasion on which a private company offers its shares for sale to the general public. It represents a significant corporate milestone, commonly utilized to raise capital for expansion, discharge existing debt obligations, or provide an exit mechanism for early-stage investors.
Follow-on Public Offering (FPO): A Secondary Public Offering (SPO) occurs when a company that is already publicly listed issues additional shares to raise further capital. Where new shares are created for this purpose, the interests of existing shareholders may be diluted; however, where the offering involves the sale of shares held by existing insiders, no dilution of existing shareholdings occurs.
Debt Public Offering: When companies raise money by issuing bonds or debentures to the public rather than selling equity.
Public offerings concern:
• The issuance or transfer of securities to the public by any means;
• The admission of a security to trading on a financial market;
• Securities offerings as provided for in Article 81 of the Uniform Act of the Organization for the Harmonization of Business Law in Africa relating to the law of commercial companies and economic interest groups.
Without prejudice to other applicable provisions, persons making a public offering must, beforehand, publish and make available to the public a document for their information, concerning the content and terms of this public offering, as well as the organization, financial situation, and development of the issuer's business, under the conditions provided for by the Commission's regulations. The information provided to the public must be accurate, precise, and truthful.
The regulation also sets out the conditions under which an issuer whose securities have been issued or transferred through a public offering must inform the public. Furthermore, this regulation specifies the procedures and conditions under which an issuer may cease making a public offering.
The State of Cameroon and, subject to reciprocity, the States Parties to the Treaty on the Organization for the Harmonization of Business Law in Africa, as well as international public bodies of which Cameroon is a member, are exempt from preparing an information document.
The document intended to inform the public, as provided for in Articles 85, 86, 825, and 832 of the Uniform Act referred to in Article 12 above, is subject to prior approval by the Commission.
The Commission may request any explanation or justification, particularly concerning the issuer's situation, activities, and results. If the issuer does not comply with the Commission's requirements, the Commission may refuse to grant its approval.
The Commission approves information documents pursuant to Article 90 of the Uniform Act on Commercial Companies and Economic Interest Groups and Article 12 above.