Trans-Tasman duo team up for jetpack IPO

by Samantha Woodhill09 Mar 2015
Firms on either side of the Tasman have joined forces to advise on the IPO and ASX listing of the world’s first jetpack company.

Martin Aircraft Company, which listed on the ASX last week, received advice from Bell Gully in New Zealand and Norton Rose Fulbright in Australia.

The launch attracted a $50m investment from Hong Kong-based KuangChi Science Limited, which is developing lighter, stronger metals and anticipates a strong relationship with the jetpack brand in the future.

According to Norton Rose Fulbright partner Iain Laughland, the two companies are set to launch a joint venture company to market the jetpack for the Asian marketplace.

“The novelty here was really the fact that we ended up having to go with a Chinese cornerstone investor… who when they saw the product and visited the premises in New Zealand, were extremely keen to be a substantial shareholder and invest in the business, and basically put $50m to work as an investment in the company.”

Dean Oppenhuis, who headed up the Bell Gully advisory team, said that explaining the risks to potential investors for a jetpack company was challenging, given the novel nature of the product.

“There are no customers and no revenue at the moment, so the novel nature of that business does have complexity when you are trying to make clear to investors what the risks are as part of the IPO,” he said.

“It’s significant for the market because it is still fairly unusual for pre-revenue, pre-customer companies to successfully come to market,” he said.

The company opted to list only on the ASX.

“It’s fairly rare for a New Zealand company to list purely on the ASX and not dual list.  Usually there is an NZSX listing and an ASX listing,” observed Oppenhuis.

The jetpacks will initially be marketed toward first response personnel, and are predicted to begin to be rolled out in the next 18 months.

Oppenhuis said there are legal issues that will still need to be worked out before the jetpacks are properly introduced to the market, as jetpacks are a completely new phenomenon for regulators.

“There’s an additional layer of regulatory risk around the certification for the jetpack to be able to fly in different jurisdictions; that is one of the legal implications that will be worked through over time as it becomes available in different jurisdictions,” he said.

“It’s a trailblazing aviation product that is going to be topical along with the airspace that drones, for example, are occupying as well.”

Minter Ellison Rudd Watts, alongside Minter Ellison in Sydney and Hong Kong, advised KuangChi Science Limited.
 
Mark Forman, who led the Minter Ellison Rudd Watts team, noted that the cross border transaction fell into the sweet spot for Minter Ellison, with one team advising KuangChi Science Limited on a complex transaction which involved aspects of NZ, Hong Kong and Australian law.

 
 

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