$20k fee rise angers NZAX firms

A new fee structure means all companies listed on the alternative market and the NZX main board with market capitalisations below $50 million must pay a $25,000 annual fee from July 1. Photo / NZME.

Introduction of NXT market for small companies results in new charging structure as NZAX is phased out

A battle is brewing over a nearly fivefold jump in fees for some companies listed on the NZAX alternative market.

Previously, NZAX-listed companies with market capitalisations below $15 million paid an annual listing fee of $5375.

However, a new fee structure means all companies listed on the alternative market and the NZX main board with market capitalisations below $50 million must pay a $25,000 annual fee from July 1.

Twelve NZAX issuers out of a total of 22 are affected.

Companies were informed about the change last Wednesday, the day before NZX launched its new NXT market for small, fast-growing firms in the $10 million to $100 million valuation range.

With NXT up and running, the exchange operator wants to phase out the NZAX.

NZAX issuers that fit the criteria can shift their listing either to NXT or the main board. Those with market capitalisations below $10 million may have to delist.

Tony Falkenstein, managing director of NZAX-listed Just Water International, which had a market capitalisation of $12.6 million yesterday, described the fee hike as "a straight bullying tactic" and said he did not want to move to NXT. "NXT is a totally different animal from the NZAX, and JWI doesn't want to be in it."

Falkenstein said he was considering his options on how to fight back.

"I think the Commerce Commission or the Financial Markets Authority will take a look at it."

Falkenstein said he would meet NZX tomorrow to discuss the matter.

Chatham Rock Phosphate, with a market value of $2.3 million yesterday, is another company affected.

Managing director Chris Castle said the firm might delist but even if it did it would still have to pay the increased annual fee this year.

"They've not given us enough notice to pull out of the market - we have to pay anyway. It's not a very good way to do business and I'm surprised because we've generally found the NZX very good to deal with," he said.

Companies leaving the exchange also cop a $16,500 delisting fee.

An NZX spokeswoman said the exchange had been talking to NZAX-listed firms for more than a year about their options.

"Clearly we are concerned that the fees may be a step up for the 12 NZAX issuers - of 22 in total - who are affected and we are in touch with them to understand their specific circumstances and plans."

She said the exchange was prepared to be flexible.

NZAX issuers considering a move to NXT have been offered "favourable transition terms".

The annual listing fee for NXT is $30,000, which includes company research and the "market maker" services of broker First NZ Capital.