Dear David: Siemens AG is a priority ADR sponsored by Deutsch Morgan Grenfell and is, I believe, a Level I. In practice that means, according to the DMG ADR site:
<<Issuer initiative/control - Depositary responsible for dividends, etc. - only OTC or Pink Sheets - used to develop initial shareholder base - limited visibility.
A Level I sponsored ADR program is the easiest and least expensive means for a company to provide for issuance of its shares in ADR form in the US. A Level I program is initiated by the issuer and involves the filing of Form F-6 registration statement. It allows for exemption under Rule 12g 3-2(b) from full SEC reporting requirements.
The issuer derives greater control over the ADRs issued under a sponsored Level I program, since a Deposit Agreement is executed between the issuer and one exclusive selected depositary bank. Level I ADRs can, however, be traded only over-the-counter and cannot be listed on a national exchange in the US.
Issuer Advantages of Level I Program:
Virtually cost-less to set up
It avoids full compliance with the SEC's reporting requirements.
By working with a single depositary bank, the issuer has greater control over its ADR program than would be the case with an unsponsored program.
The depositary acts as a channel of communication between the issuer and its US shareholder base. Dividend payments, financial statements and details of corporate actions will be passed on to US investors via the depositary.
Can support a Rule 144A ADR facility
Can be used to maintain investor interest
Issuer Disadvantages of Level I Program:
It cannot be listed on any of the national exchanges in the US. As a result, investor interest might be somewhat restricted which may limit the issuer's ability to enhance its name recognition in the US.
Capital raising is not permitted under a Level I program. which means it is traded OTC: BB and is restricted from raising capital in the US.>>
An analyst at DMG covers the company. A full explanation of the levels and what sponsorship means for an ADR is supplied on the DMG site: adr-dmg.com From Siemen's own website, siemens.de , you can see how the stock trades on the Frankfurt market. Settings below the chart allow you to choose time and to judge the performance against two comparisons. A 5-year comparison against the DAX shows Siemens to have done as well as the general market and to have significantly underperformed since 11/96 (the company has been undergoing a major restructuring) although it too increased in value.
It would be, as I'm sure you know, questionable to assume that because FNTN and Siemens both trade as BB stocks in the US that FNTN is on any parity with the German company, which has 571 million shares on the Frankfurt exchange and an equally huge global base.
Nevertheless, Siemens was probably an excellent choice to develop the FNTN intranet product. Within the Siemen's site -- look for Press releases - top of screen link. (You can also search the site using keyword "intranet" for some interesting results.) Look for the press release dated 10.11.1997 ("Siemens opens Multimedia Applications Forum in Berlin"). It describes a telecommunications solution very much like what FNTN seems to be striving for.
--Ariella |
