Chapman planning to go public Offering could raise up to $9 million

Brokerages

January 10, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

Nathan A. Chapman Jr., president of a Baltimore-based brokerage bearing his name, plans to take the firm public with an offering that could raise up to $9 million.

Chapman Cos. will issue from 850,000 to 1 million shares of stock at prices ranging from $7 to $9 a share, according to the company's prospectus filed with the Securities and Exchange Commission.

The firm plans to apply for quotation on the Nasdaq market for small capitalized companies under the symbol "CMAN."

Chapman Cos. also plans to underwrite its own offering, the prospectus said.

Neither Chapman nor his attorneys could be reached for comment.

If the offering is successful, Chapman Cos. plans to use the money to beef up capital, hire more stock researchers, expand ** its corporate and government financial transaction business, and possibly make an acquisition.

The company also plans to expand its recently launched "domestic emerging markets" operation, which seeks business from companies controlled by minorities, the prospectus said.

Chapman, 40, will own between 61 and 64 percent of the company.

Chapman Cos. is a small firm, with six brokers at the end of October. Revenue was $2.5 million for the 10 months ended Oct. 31, 1997, and net income was $260,907.

The offering is an "indication that they probably need some capital," said a broker who did not want to be identified. "With brokerage valuations at unprecedented levels, why not" go public?

In November, Maryland's retirement board agreed to add $40 million to state funds managed by Chapman Minority Equity Trust, which supervises a group of investment managers who specialize in start-up businesses run by minorities.

But business has not always gone smoothly for Chapman Cos. Three-and-a-half years ago, a proposal to invest $10 million of city pension funds in the company collapsed when the SEC warned that the city could face lawsuits and administrative sanctions if problems arose at Chapman. The investment would have also led to the city's effectively controlling Chapman Co.

Two years ago, Chapman paid a $30,000 fine to settle a complaint by a securities regulator that the company bought and sold stocks while it failed to maintain proper capital ratios in 1993 and 1994. He was also suspended from performing financial and operational duties from the firm for 10 days.

Chapman neither admitted nor denied the allegations.

Pub Date: 1/10/98

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