Corporate Finance : 3DM Worldwide Issues ADRs Instead of Listing on Nasdaq


UK-based 3DM Worldwide, which develops patents for the plastics industry and manages businesses in the Kyrgyz Republic, issued American depositary receipts in the over-the-counter market.

The companys US subsidiary, Detroit, Michiganbased 3DM Technologies, had proposed seeking a listing on Nasdaq by acquiring control of an existing reporting company under the US Securities and Exchange Act.

But after considering the costs and effects of a Nasdaq listing,3DMs directors concluded that opening up the companys shareholder base to a larger number of US citizens would be achieved more effectively for the time being by creating ADRs, Chairman Ken Brooks said in a statement.

Each ADR is equivalent to ten 3DM common shares, which are traded on the Alternative Investment Market of the London Stock Exchange. Bank of New York is the depositary for the ADR program.

The British company acquired Detroit-based 3DM Technologies in October 2001.The US subsidiarys patented powder impression molding, or PIM, process involves the fusing of powdered thermoplastic resins together with reinforcing materials at relatively low temperatures.

The reduced temperatures enable a high proportion of recycled materials to be used, reducing the wear and tear on the manufacturing plant, particularly on molds.The process allows the production of a plastic composite that has the strength and other properties of steel, combined with weight savings, according to the company.

3DM entered into an agreement with Daimler Chrysler to develop the process for manufacturing a plastic pickup box for the Dodge Dakota truck. In December 2002, 3DM signed an agreement with Silkwood Financial to license the use of the PIM process to develop prefabricated housing aimed at the Mexican market. Other possible applications, including fence paneling, appliance casings and packaging are under consideration.

The directors of 3DM say the company has positioned itself as an acquirer and developer of intellectual property that can be sold or licensed to other businesses.As a result of its new focus on developing patents and licensing rights, the company plans to dispose of its assets in the Kyrgyz Republic, including a wool mill, a printing company and a toilet-tissue manufacturing facility.These businesses are grouped together as Camco, or Central Asia Management Company.

The 3DM group has a development facility in Detroit, which opened last year, and a new UK plant under construction in Trowbridge. 3DM will use these facilities to develop new products, build prototypes and prove the effectiveness of each project. The company does not intend to undertake mass production, but rather to collect royalties on the production processes.

Gemplus Selects Deutsche Bank

Luxembourg-based Gemplus International, a leading provider of smart cards and mobile Internet access, appointed Deutsche Bank as successor depositary for its ADR program.

Yves Guillaumot, chief financial officer of Gemplus, says the transfer to Deutsche Bank reflects the companys intent to further develop its presence in the US equity capital market in coming years.

Gemplus, whose shares trade on Euronext Paris, offers software and hardware products and services that enable wireless network operators to offer their customers secure communications transactions using smart cards.The cards can be used for paying bills and making phone calls, as well as controlling network access and storing medical information.

Gemplus produces cards with radio-frequency chips, electronic tags and card readers. It also offers consulting, design and integration services.

The deployment of wireless local-area networks, or WLAN, equipment in public- access places and residential areas is expected to become widespread in the near future, the company says. In April 2003,Gemplus entered into a strategic relationship with Texasbased Transat Technologies to address the security concerns of WLAN devices and enable cross-carrier roaming and other applications.

ASIA Indias Morepen Labs Lists in Luxembourg

New Delhi-based pharmaceutical company, Morepen Laboratories, approved a global depositary receipt issue to be listed on the Luxembourg Stock Exchange. Morepen, which manufactures and markets generic drugs in more than 50 countries, says it will use the proceeds of the issue to fund operating and working capital requirements and to retire debt.

Morepen is one of the largest producers of Loratidine, a drug that targets allergies. US-based Schering- Plough held the original patent for the drug under the brand name Claritin.The patent expired in December 2002 in the United States, and the status of Loratidine changed from a prescription to an over-thecounter drug.

The US Food and Drug Administration gave Geneva Pharmaceutical, the generic arm of Novartis, six-month exclusivity status to Loratidine. Morepen is the main supplier of the drug to Geneva Pharma.

Morepen also announced the demerger of its Dr Morepen retail arm into a separate entity.

AUSTRALIA Cue Energy Launches Level 1 Program

Melbourne,Australia-based Cue Energy Resources, an oil and gas exploration and production company, launched an ADR program in the US over-the-counter market.

The Level 1 program is backed by Bank of New York. One ADR represents 100 Cue Energy ordinary shares, which are traded on the Australian, New Zealand and Port Moresby, Papua New Guinea, stock exchanges.


Gordon Platt