The chances of Bacardi-Martini becoming a public company may take a step closer in the next couple of months. The Bermuda-based company yesterday sent out proxies to all shareholders seeking their approval to increase Bacardi's capital structure, which would require the issuance of additional shares beyond the 23.5 million currently held by about 600 family members.

The Miami Herlad yesterday reported that the plan "could be the first step toward an initial public offering".

However, it also said that it would still take a second shareholder vote and the approval at the board level before any new shares could be sold on the public markets.

"There are absolutely no plans to take the company public at this time, nor is there a need to raise any funds,'' said Ruben Rodriguez, Bacardi's chairman and outgoing chief executive was quoted as saying. "But tomorrow that may change. It's in the company's best interest to have the flexibility in its financial structure to do private or public deals.''

The proxies represent the first time in recent history that shareholders in the company will have taken a formal vote on moves to secure new capital.

In 1999, plans for an IPO were shelved after the failure to get shareholder support, a chain of events that cost then CEO Chip Reid his job. Rodriguez is therefore treading carefully.

"We felt shareholders would be more comfortable with a two-step process," Rodriguez said. "It's slower and easier for them to digest."