David Sumner is CEO and chairman of Sumner Group Holdings (SGH), a Jersey-based investment company, with offices in Dubai, which acquires, builds and manages businesses across the globe. SGH announced last month its plan to raise a further $80m in addition to the $20m already under intention by Abu Dhabi investors through a security token offering (STO) via its Singapore affiliate. This is ahead of a planned listing on the London Stock Exchange next year.
Crypto A.M. asked David why he decided to opt for an STO as his company’s fundraising route and his plans for growth.
Why have you chosen a security token offering for fundraising?
There are a few good reasons. Firstly, it is a more cost-effective way of raising money. Second, it allows SGH to access new pools of capital. Finally, the entire process is much quicker and less cumbersome than raising money directly through a more traditional initial public offering (IPO).
Furthermore, to reiterate the main benefit of an STO – security tokens are backed by an underlying asset. An ICO, for example, is not. You get total security backing an STO. In launching this STO, we are offering potential investors access to a digital asset backed by a privately held diversified portfolio of natural resources, building materials, digital media and healthcare recruitment companies. Security backed by real assets.
You’re based in Jersey and the UAE, yet you’ve chosen to issue tokens from Singapore on an exchange regulated by the Financial Conduct Authority in London. Why is that?
The regulatory frameworks that regulate STOs and other digital assets are still in their infancy. Working with experienced advisors, we have sought out the some of the most advanced STO regulators to ensure maximum governance for our STO. The Monetary Authority of Singapore launched its regulations in 2016 and continues to be proactive with leading industry players. It was very important when deciding to work with an FCA-regulated exchange in London that our tokens are attractive to and appropriate for institutional investors around the world.
How will investors benefit from your STO?
Investors benefit from, first, digitally secure corporate governance throughout the transaction; and, second, a revenue-yielding product ahead of the planned debut of SGH Global on the main market of the London Stock Exchange where STO investors will be invited to participate. This strategy enables investors to benefit from ongoing liquidity opportunities. We are also integrating blockchain technology throughout our group, which will multiply the upside for existing shareholders and incoming investors.
After you close fundraising, what’s next?
We plan to use the proceeds to continue supporting the growth of our portfolio companies, including working capital requirements. The proceeds will also help facilitate the integration of blockchain technology throughout the group to increase efficiency and allow us to execute on additional opportunities for investment. All this will position SGH well for our planned London Stock Exchange debut next year.
For more information see www.sghglobal.com