Monday, 16 September 2019
IPO method of reverse takeover
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Large companies have long appreciated the benefits of entering the Western stock market, and often make it a standard, long and costly way, starting with the release of ADR in the third level. This method of road, time consuming and therefore often not available to companies of small and mid-cap, or unacceptable for other reasons. TAXC Limited helps small and medium-sized companies to more expeditious and less costly program to attract foreign investment - a conclusion on the Western stock market by "reverse takeover" of your company's existing Western publicly traded company of the shell (the so-called Shell Company), ie technically you sell your entire business Western investor, who then under it attracts additional funding.

Using its international channels, ICG picks for the client company above Shell Corporation - European or American company, which appeared in his time on the stock exchange, but later, because of unfavorable market conditions, has terminated its core business, sell their assets to cover the expense of commitments and to suspend its commercial activities. In some cases, the possibility of new European stock Addiction, which is recorded at the exchange, receive quotes, and then acquire assets abroad and will issue additional shares.

If we consider the ready-made company, it usually is not burdened with any debt, no litigation, public joint stock komaniya, however, has not lost its place on the electronic exchange and even a few months stay in a "sleep" state on NASDAQ or LSE . Its shares are still registered and have a formal quotation (close to zero, since the assets and turnover she had not) and could theoretically be bought and sold to the public. The acquisition of this company and gives owners of foreign companies a quick and inexpensive access to the stock market.

If we consider the countries of Europe, then in each of them has its own stock exchange, and even a few exchanges, and if we consider oragnizatsiyu IPO by the reverse takeover, if necessary, create a public image of a European company (actually repurchase additional shares made at the expense of the existing asset owners and the stock market displayed a nearly 100% of shares), then for example the Swiss Exchange in Zurich, Bern or may not be the best option.

Find a company in the EU, whose shares are traded on a European stock exchanges, will be much easier than directly to the company on LSE, NYSE, NASDAQ. An IPO on the LSE, NYSE, NASDAQ is recommended in case Esil you really decided to raise funds and investors are willing to sacrifice some of the rights to control and manage your business in exchange for investments.

Certainly easier to be out on AIM, as this market is positioned LSE as an alternative market for small and growing businesses - but think how much you want to be found in this category? Perhaps a more simple method would reverse takeover

The essence of the attraction of foreign investments by the reverse takeover:

Bought by domestic owners European Shell Company acquires Ukrainian or Russian company, in exchange for 90% -95% of its shares. That is, in fact, the owners displayed on Western stock exchanges the company pass control over the shareholder of a public company, owned by 90% -95% of the same as beneficiaries. Another 2% -5% of the former Shell Company at the same time leaves its original shareholders, and that support the liquidity of shares in the initial stages of trade, and the remaining 3% -7% passed TAXC Limited and underwriter for the program and, more importantly, for the subsequent promotion displayed on the Western market enterprise.

Domestic enterprises, thus, becomes a holding company with head of European publicly traded company controlled by owners of the enterprise, and production branches (actually company) acting as before, in their country. Financial statements for the given structure is consolidated, whereby the parent company (formerly Shell Company) shows in its financial statements the assets, turnover, profits and other details of its Ukrainian subsidiary and the pacifier becomes a fully functioning company. Accordingly, its actions are filled with economic content and gain value, and often much greater than the enterprise would be valued at otechestvennomfondovom market.

Advantages to attract foreign investment by the reverse takeover:

  • Increase the capitalization of the company. The company's capitalization, which can be achieved in the U.S. or European stock market by 3-5 times the value of the company, which can be achieved in the CIS. In addition to market capitalization growth from the company's operating performance, an additional factor in increasing its cost will be very current in a public company Europe to quickly and effectively to attract the western stock, as well as cheap and short-term credit financing.
  • Gaining access to foreign investment. The yield of the stock market in Europe allows you to create an effective and low-cost mechanism for attracting long-term financing for large-scale investment projects of the company.
  • Increased liquidity. As a result, the spread of information about the company ICG and to stimulate investment interest and consumer demand for its shares, the company's shareholders will get easy and quick sale at the market of any shares, even a relatively small packages. Given that such sales may be based on growing the company's capitalization, its shareholders will get the opportunity to obtain financial resources in the West, while significantly eroding their control over the company.
  • Economic security. A European public company carries domestic assets, operations and issues of economic security of the company into the international plane. Unjustified claims against the company will be difficult fact that there she sputtered U.S. and other Western shareholders, who in this case will not affect the management of the company and to interfere in matters of corporate control.

Requirements for companies to attract foreign investment

Requirements for the company using the method of reverse takeover is less severe than during the IPO: the assets and / or annual turnover can range from $ 3 - $ 10 million, the company can only go out to the point of profitability, and audit can be conducted in just 2 years . At providing timely information for the preparation of information memorandum, as well as operational auditing process reverse takeover can be accomplished in 3-4 months. Depending on the size and structural complexity of the client company, the total cost of the program ranges from $ 300.000 to $ 550.000, which includes the value of the information memorandum and an audit client company, as well as the costs of due diligence and acquisition of Shell companies.

The cost of future maintenance of a public company in Europe or the United States is $ 120.000-$ 150.000 a year. The cost of the company depends on the current state of asset positions and quotes at the stock exchange and is discussed individually in each case.


More often OTC share issue "Europeanized" in a way the company is still possible to achieve its full liquidity. Sometimes even the initial funding is in the process of reverse takeover, when available, some Shell corporations balances in bank accounts (sometimes measured in millions of dollars) exchanged for an additional share of stock, off the original Western shareholders that immediately with the interest pays for all costs of the company to implement this program of reverse takeover. However, full implementation of all the benefits of this program is still paired with an increase in trading turnover of shares displayed on zapadnyyfondovy market enterprise.

As the efforts of the ICG, this newly formed publicly traded company begins to awaken the interest of public investors who are actively communicating about themselves - in the form of press conferences, meetings with potential investors and market makers, press releases, media materials, official reports to the Commission on securities, as well as preparing expert ICG Analytics - the company's shares begin to trade more actively, become liquid, and at some point ICG organizes an additional issue of its shares - and, in fact, IPO - placing them in the U.S. and European public market (either as private placement in the U.S. or Europe), and thus attracting the client company required investment capital. It is important to note that the funding is not a one-time, and may be repeated several times in a series of additional stock and OTC issues with a variety of financial instruments and mechanisms.

Firmed in the U.S. stock market, earning it a "credit history" and to improve the liquidity of its shares, the domestic company obtains the mechanism of a nearly unlimited resources to attract foreign investment, provided that funds from each issue of the shares, are used efficiently and improve its operational and financial indicators.

Benefits of Reverse IPO

First - this time, because You do not need to wait 2-3 years, to adjust rates, you're buying a company which is publicly traded and simply organizes an additional issue - which is 100% guaranteed yield on a stock exchange. Another question is who will acquire an additional issue - but it's more a question for business owners, because Exchange objectively evaluate the risks and benefits of each proposal. But nevertheless, you get a chance to get access to a virtually unlimited in scale local business source of capital.

First and foremost, is to get access to giant-scale investment resources, increased compared with the local stock market valuation of shares in companies and unattainable in the local market of their liquidity. For example, the capitalization of only one electronic stock exchange NASDAQ is now $ 2.5 trillion, while that in 1995-2003. total only IPOs (IPO) it exceeded $ 220 billion. The average ratio of capitalization of NASDAQ to their annual turnover and equity, even after more than three times the drop there stock quotes over the past three years, now stands at 2.0 and 3.0, respectively, which are 2-3 times more than the company's estimates, say, the Russian stock market. In this case, the daily turnover of trades on the NASDAQ today is about $ 23 billion (1.5 billion shares), an average of about $ 4.7 million a day on each of the 4,900 traded on the Stock Exchange companies.

Assistance in attracting foreign investment

Using an extensive network of business contacts, the company ╚TAXC Limited╩ will help you choose a public Shell Company, the relevant requirements of the customer, will hold talks with shareholders and the leadership of Shell Company to provide the best environment for the client will retain qualified and competent lawyers and accountants to examine financial and economic activity Shell Company. If necessary, possibly acquiring European companies after 1930, registration for subsequent registration or acquisition on behalf of, napirmer, the Swiss public company Shell Company, quoted on the Stock Exchange, which will produce additional emissions.

Company ICG organizes a final clearance of the acquisition Shell Company and filing all necessary forms to the Commission for Securities, as well as full support for further activities

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