All you need to know about cash shells on public markets

Dormant companies on trading platforms, known as cash shells, are an excellent way to take your business public: here we look at the best route to take and some of the most attractive targets out there

Accessing capital markets is a major milestone that the majority of entrepreneurs are working towards in their early days.

But the nature of these markets means that it is becoming increasingly difficult to reach the point where small businesses can both establish and maintain their place on the platforms.

These factors combine to bring about the phenomenon of small businesses entering the markets through an alternative route – by buying up cash shells and taking their own business public through the process.

But what are the numbers behind the stories and what do you need to know if you’re looking to follow suit? Here we look at some of the shells available and some of the wider facts and figures you need to know.

Why cash shells?

Cash shells can be found on AIM, IDSX and London’s main trading market. There are a total of 83 shells available according to the Growth Company Investor report for 2015.

In 2014 the number reached 108 across all markets, the highest recorded since 2009. But in 2015, despite the slight drop off since last year’s peak, there are still more shells available than any year between 2009 and 2012.

Each cash shells holds an average of  £3.29m cash value. The average cash shell has a market cap of £10.3m and across the board £145.05m is held in these shells.

>See also: Alternative routes to public markets beckon, says report

But the value of these shellsbgoes beyond the figures. Arlington Group Asset Management director Malcolm Burne says he has been “fascinated” with the value of shells for around 40 years.

In that time he has worked as an equity analyst and later as an investment editor at the Telegraph Group. He recalls the number of shells dramatically increasing in the 1970s following “huge market swings” at the beginning of the decade. And since then he’s seen the appetite for shell investment grow.

“Going public in general could be the next big wave in micro-cap funding,” he explains. “Helped by the rise of alternative finance and the imprint that those innovations are leaving on the market.

“Private companies are considering listing facilities where the main principals can take advantage of the attractive entrepreneurial relief at only 10 per cent of the sale of their shares before the tax rate is increased as feared.

“Other profitable private companies have a wary eye on a ‘toppy’ bull market and fear missing out on their chance to capitalise on an opportunity to partly cash out.

“They only need a small push to get them quoted, with time of the essence, according to many, as they look at the valuations ascribed to many stocks on the market at the present time.”

What makes a good cash shell?

Intuitively, the first thing you must consider is identifying the best shell for your needs, according to Eran Zucker from Peterhouse Corporate Finance.

“One of the most important factors is whether the shell is deliverable,” he explains. “Is it controlled by the board or by a principal shareholder? You should find out early in the process who the main people you need to speak to are, and what the decision-making process is.

“Time is, after all, money and you don’t want to waste any of it, ever. Another important factor is the amount of cash in the shell and whether an additional fundraising is necessary as part of the reverse takeover.

“Some shells believe in only maintaining enough cash to cover the cost of the reverse takeover, while other shells hold much larger amounts, mitigating the need for a further fundraising. As a rule of thumb, the larger the amount, the higher the premium you will have to pay for it.”

>Related: Ghost in the shell – dormant companies on public platforms

Top cash shells on the market right now

So by these definitions there are several factors that go into identifying the best shell for you. The Growth Company Investor report contains a description of each shell, categorised by sector. It also lists investments, cash held, leading advisers and names of directors for more than one shell. Below are three examples; one from each named platform.


Resource Holding Management AIM:RHM

Telecom, Media, Technology, Asia

Block E01-02, Jalan SS7/13, Plaza†Kelana Jaya, Petaling Jaya, Selangor,

47301 Malaysia; Tel: +6 03 7651 0188; Website:

Market cap




Net current assets


Premium to assets


Balance sheet date


First day of dealings


Non-Exec Chairman

Datuk Oh Chong Peng

Managing Director

Cheong Chia Chieh


Lee Koh Yung

Ind. Non-Exec Director

David Sherick

Ind. Non-Exec Director

Liew Chuen


Allenby Capital

A period of change has seen this group transform itself into an investment company, focused on TMT assets in South East & East Asia.

This change was largely due to RMH selling down its controlling stake in PUCF, a TMT venture involved in the advertising, media, technology and IT publishing sector in Asia.

RMH now owns circa 41% of PUCF and its shares were suspended when PUCF announced it would undertake

a substantial fundraising (it is looking for up to £21m) to enter the renewable energy sector.

RMH’s involvement in this fundraising constitutes a reverse takeover under AIM rules.

Capital for Colleagues ISDX:CFCP


9th Floor, 111 Picadilly, Manchester M1 2HY

Market cap




Net current assets


Premium to assets


Balance sheet date


First day of dealings



Richard Bailey

Chief Executive

John Eckersley


Alistair Currie

Non-Exec Director

Edmund Jenkins


Peterhouse Corporate Finance

CFC is an inspiring venture that launched onto ISDX last year after a £2.2m fundraising.

Its remit is to invest in employee owned businesses – an ethical goal you might think, but also a sound financial goal since this sector generates revenues of over £30bn in the UK alone.

Thus far the group has invested in or lent money to “11 unquoted EOBs and 12 publicly traded companies displaying demonstrable employee engagement”. This includes businesses in construction materials, IT services and manufacturing. NAV continues to improve quarter on quarter.

Highway Capital MAIN MKT:HWC


Eden House, Reynolds Road, Beaconsfield HP9 2FL;

Tel: 020 3427 3382; Website:

Market cap




Net current assets


Premium to assets


Balance sheet date


First day of dealing


Non-Exec Chairman

Dominic Wheatley

Non-Exec Director

Maciej Szytko


Keith Bayley Rogers

This stand-alone cash shell’s ability to find a suitable investment or engineer a reverse takeover has not been helped by the disagreements between its two largest shareholders (Bruce Rowan and Maciej Szytko), or its financial health (actual cash had dwindled to £10k by the end of February 2015).

The group’s borrowing powers were altered in April this year and since this date Szytko has lent the group £220k.

Maybe a deal will now materialise?

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.