Switzerland-based Interprom Mining AG will be among the first businesses in the world to offer traditional equity capital participation shares in the form of security tokens. The company will launch an STO in Q2 2019, bringing its Blueshare Security Token (BST) to the market.
Interprom’s goal is to fund its mining expansion
Interprom Mining AG is the majority owner of Interprom EOOD (90% stake), a Bulgarian construction and mining company with 23 years of experience and a long-standing track record.
The company is undertaking large-scale construction projects such as complex urban infrastructure, wastewater purification plants, healthcare, educational facilities, power generation, and road construction. It is currently involved in a subway construction project in Sofia, Bulgaria, worth 90 million Euros.
Over the past five years, Interprom has been diversifying its business activities and has invested in natural resources mining concessions worth an estimated 3.4bn Euros. The company claims to have further mining projects in the pipeline worth 22bn Euros. Funds raised from the STO will be invested directly in the company’s mining and exploration activities.
BST tokenizes equity capital share ownership rights
Interprom Mining AG is regulated under the laws of Switzerland and has issued its Prospectus to the Finma. The prospectus is public; investors can download it on the company’s website.
The offering complies with the Swiss Code of Obligations and Swiss Financial Markets Regulatory Framework of Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Geneva-based KYC operator Altcoinomy will support Blueshare’s whitelisting and onboard and pre-approve investors with respect to AML/KYC compliance.
Private placements started in November 2018. The public sale is planned for Q2 2019 after the prospectus has been approved.
BST tokenizes an equity capital participation share certificate of Interprom Mining AG via an Ethereum-based smart contract. It includes a token/share ratio of 1:1, meaning that each security token entails the right to exactly one share. Investors can benefit from the token’s value appreciation and dividend payouts.
The project’s hard cap is set to 128m Euros. Interprom Mining AG will issue 300,000,000 security tokens – 80,000,000 will be sold at the cost of 1.60 Euros.
After the initial issuance, Blueshare plans to list its tokens in at least six regulated, licensed and compliant security exchanges by the end of 2020. The company has not yet released where it plans to list its tokens but has signed an MOU with Swiss SCX.CH exchange for listing BST tokens in August 2019, when SCX expects to receive its license.
STOs are ideal financing vehicles for companies like Interprom
So far, most European STOs were conducted by companies that had at least some involvement with the blockchain space. Interprom, however, is a traditional construction and mining business that has no roots in the digital industry. That’s what makes Interprom’s STO an exciting use case.
The company employs more than 500 people and takes part in major public infrastructure procurements including the public and private sector. Interprom is not a large-cap multinational but no small fish either. Traditional financing alternatives, such as an Initial Public Offering (IPO), are expensive and not an easy undertaking for a company the size of Interprom. Thus, the cost-effectiveness and liquidity promise of security token financing are attractive value propositions.
The Blueshare STO could set a powerful example for other businesses. If successful, other companies could follow Interprom’s lead and we might see more companies from traditional industries entering the token economy.