Qantas broadens US reach with OTC upgrade
More American investors will be able to own a slice of Australia’s largest airline operator after Qantas Airways upgraded its American depository receipts (ADRs) to be traded on the OTCQX marketplace.
Previously available on the OTC Pink marketplace, Qantas is now one of 31 Australian companies trading securities on the higher market tier, which calls for greater levels of disclosure.
A number of other Australian companies have joined OTCQX recently, including communications firm NewSat, travel booking company Webjet and Fortescue Metals Group. With a total market cap of $4.8 bn, Qantas is one of the largest.
For the airline, the move marks an opportunity to expand its investor base in America. ‘The US is one of the Qantas Group’s most important international markets, and we look forward to broadening our exposure to investors across North America through OTCQX,’ says Alan Joyce, the airline’s CEO, in a press release.
OTCQX offers a way for non-US companies to make their shares available in the US without following SEC reporting requirements, as long as they make available the information reported in their home countries in English.
A 2012 study revealed why some Australian companies favor dual-listings on the OTC market in the US. The report by law firm Baker & McKenzie found that only 44 percent of Australian firms with dual-listings around the world believed the dual-listings met their requirements.
Looking at just the firms with US OTC quotes, however, a majority of respondents said the benefits outweighed the compliance requirements and costs.