Monday, 16 September 2019
JFGT (20190916-02:04:01 to UTF-8) ART 165 en => fr
IPO. Attracting investment capital
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One of the most effective ways of attracting foreign investment is the output of enterprises in the global stock market with further financing in the form of additional issues of shares. Advantages to attract investment through IPO to enter the international stock market as follows:

  • Getting at least 3-5 times higher market valuation of the company compared to CIS countries
  • Access to the stock market is hundreds of times more capital than Ukrainian or Russian, much better organized, have considerably wider range of instruments and funding mechanisms, precisely consistent with the aims and objectives of the issuer, and tend to finance even small-sized companies.
  • Providing increased liquidity of shares, unattainable in the Ukrainian securities market, and their transformation due to this in the means of payment: liquidity trading on the prestigious international venues, the shares of the Ukrainian company may be used as collateral to obtain debt financing, used instead of cash for acquisitions companies, payment of consulting and PR services, encouraging middle and senior management. If necessary, the owners can sell them in small batches through the exchange mechanisms for the broad mass of portfolio investors, providing personal needs in free cash without loss of control over the business.
  • Equity financing does not create the debt burden and the need to pay interest.
  • The best conditions to maintain control over the enterprise: to attract a certain amount of funds in the U.S. or in Europe may be required to release 3-5 times less than the new shares, which means a much smaller package blurring the original owners. As a result, the company is more likely to give a small package of their shares (less blocking), and thus attract significant funding. Moreover, the sale of shares in the securities market in Europe or the United States means their implementation is not "in one hand, and dispersed shareholders, each of which can not and does not want any control over the business of the issuer.
  • Improving the overall status, credit rating and credibility of the company, enabling it easier to establish commercial ties and attract borrowed funds abroad, where these funds are much cheaper than in the CIS, and provides for a much longer period of time.
  • Strengthening the economic security holders of the company, which received the western public status, due to transfer to the international plane administrative, political and country risk.

Requirements for companies

  • Show steady growth in financial indicators (turnover, assets) and increase its market share.
  • Have the size of assets and / or annual turnover of at least $ 5 - $ 10 million, and optimally, from $ 25 million
  • Be audited by Western tandartam and have statements prepared in the format of GAAP.
  • To operate in attractive to analysts and investors are oriented toward sectors of the economy, and for high-tech companies - have confirmed an expert know-how.
  • Have enough liquid balance and not to be overly encumbered accounts payable.
  • Have qualified management, which has long-term vision of business development strategy.

Allocation of shares

Public company can raise equity financing using the following mechanisms:

  • Private placement. Issued shares are limited in distribution to 2 years, then there may not be sold unqualified (private, medium and small) to investors during this period. Some of the restrictions are removed after the first year. In this case, each individual holder of restricted stock is entitled to sell up to 1% of their total volume in the quarter. Shares in this case estimated 30-35% discount relative to the average quarterly price prior to fundraising.
  • Public accommodation. The company produces unrestricted shares freely traded in the securities market. Stock price is set from 7% -10% discount to the average quarterly price on the date of funding. The better the liquidity and financial performance of the company, the smaller the discount on the shares being placed. To increase the level of funding with minimal dilution of the original owners of the package is necessary to increase pricing and liquidity. To do this for several quarters preceding the placement, ICG Together with our partner HSBC Privatebank Switzerland disseminates information about the company among the maximum number of investors that stimulates market demand, and consequently, liquidity and growth in the stock market.

Procedure for IPO in U.S.

Sequence of implementing this type of financing for medium and moderately large Ukrainian companies is as follows. First, ICG arranges private placement of shares and / or bonds of companies qualified investors within the framework of the so-called Regulation D. Then draws the underwriters for public offering (IPO) in the form of direct listing on an electronic securities market OTC Bulletin Board, the regional U.S. exchanges or a national electronic stock exchange NASDAQ. Step-counter issue takes 3-4 months, costs $ 40 - $ 60 million (plus a fee of 4-5% of the total allocation) and allows by itself to raise up to $ 5 million of external funding.

At the same time, creating a relatively "low blood" (and without exhausting the registration issue in the Securities and Exchange Commission USA) precedent placing the company's shares among the American public investors (which can then resell these shares, using the so-called Rule 144), a private placement facilitates the next stage - a direct listing of shares - which occupies 6-9 months (at the contingency planning for 1,5-2 years). It is necessary to direct listing for about $ 600.000, plus underwriting commission of 4-5%, but it allows you to immediately attract the large amounts of funds and simultaneously obtain the status of the company, publicly traded on U.S. stock market. It's cheaper and easier than popular with the Ukrainian "blue chips" release ADR in the third level. Moreover, in future it is possible to build a "chain" of private and public offerings (such as PIPE), targeted at different groups of investors, when each new issue takes into account the results of the previous one.

AIM. Alternative Investment Market in the LSE. An IPO on AIM

Alternative Investment Market ("AIM") - a market of the London Stock Exchange, created specifically for small and growing businesses around the world. The market value of most AIM companies operating in the range from 2 to 100 thousand U.S. dollars in the absence of any limitation in volume.

AIM - this is not the London Stock Exchange, while many companies like to substitute the terms in the official press release stating that they held an IPO on the London Stock Exchange, although in reality it was just placing the shares on AIM, that is, in fact, by Western standards, companies Onoshi classified as "small and emerging business".

Low requirements to the London AIM listed companies certainly discourage potential investors that all things being equal predpochut invest in kompanai, which are listed companies quoted on the London Stock Exchange.

Criteria for admission to AIM are less stringent than the requirements for the companies included in the official list of companies whose shares are traded on the London Stock Exchange. For example, for admission to AIM is not required to have experience and proof of trading their shares for three years or the implementation of the minimum amount of its share capital.

Following admission to AIM to the companies also apply less stringent regulatory requirements than companies included in the official list of companies whose shares are publicly traded. There is no need to obtain shareholder approval for the acquisition and disposal of equity to the same extent that it is necessary for companies included in the official list. The cost of finding and operating the company on AIM in general is much lower compared with the cost being spent on the official site (The official list of companies).

Since its inception in 1995. AIM benefited more than 1600 companies, and it was sold shares totaling more than $ 30 billion. The total market capitalization of all companies whose shares are currently traded on AIM, exceeds 70 billion U.S. dollars.

Shares on AIM provides a company the opportunity to find additional funding for the goals outlined in the strategic plans. The basis of the objectives laid growth companies. In addition, existing shareholders an opportunity to sell at a good price only some part of existing shares. In this case, the company's management will continue to maintain control over its management.

Quotation of the shares on the AIM helps to improve brand recognition by the company, its reputation in the world market and can reinforce its financial reputation. In addition, the company has an opportunity to acquire shares in other companies to use as legal tender their shares instead of cash.

IPO on the stock exchanges in continental Europe.

If we consider the feasibility of an IPO on AIM, compared with other exchanges in Europe , if you really need AIM investors will not be the best option if you wish to buy shares "in his own" and to pretend that attracted foreign investors, then this option is also would be acceptable, but more costly and time consuming than placing on the stock exchanges in continental Europe .

Quotes of the European stock exchange may be a good basis for deriving a subsidiary of a public European company or shares of the company at the LSE. In the first case in England open JSC (PLC), within 2-3 years "customize" indicators of Addiction to the requirements of the Exchange, similar actions are carried out with the company in continental Europe.

All the same in other European countries it will be the main market of the country, intended for public sale of shares, and it will be much more reliable to look into the eyes of investors than the "alternative market" at the main exchange. To make the process of attracting investment has been effective (at least traditionally look for western investors) - the company must be registered in the same country as the Exchange, even if the rules do not prohibit the exchange quotation of shares of foreign companies.

As a comparison, we give an example of english company + account in the Baltic states - yes, it is legal, but explain any logical thinker investor, why? Especially because the account at home (in England) the company does not. Do not just accepted, although not prohibited. And accordingly, the chances to attract independent funding is almost minimal, therefore, for companies whose business is located in the CIS, the recommended alternative IPO c using reverse takeover.

Alternative IPO. Attracting foreign investment through reverse takeover

If the requirement of "direct╩ IPO are for your komapanii-compliance or unacceptable for reasons strategichieskim, ICG is ready to offer you a more expeditious and less costly program to attract foreign investment - a conclusion to the stock market in Europe and the U.S. through "reverse takeover" - already existing or specially created European (American) public joint stock komaniya, which is traded on the Exchange, will serve as a shell company (as nazyvaemam Shell Corporation) ...

If you are fundamentally not suitable IPO, but need to attract investment in the business?

Perhaps your business is not so proznachen how they want to see him on the European stock exchange, or simply you have no desire to sell their shares to anyone - then open yourself an investment fund in one of the premier banks in Switzerland and Western Europe. ICG ready to offer you alternative financing instruments business and raising capital. The fastest way to guarantee virtually 100% confidentiality and do not involve ownership rights transfer upravelniya, is opening an investment fund at a bank in Switzerland, Luxembourg or other European countries

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