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Presentation transcript:

18-Nov-16

Investor Requirements and Financing Techniques Nick Alfille James Bronte-Stewart 18 November 2016 18-Nov-16

Introduction Eyemax – objectives and requirements Outline of Session IPO Main funding options Factors influencing choice of funding option Detail on debt and equity raising Alternative funding methods FX/Currency Issues NOT TAX! 18-Nov-16

IPO Why? Access to market Access to capital Raise profile Ability to use shares for acquisition Incentivisation But …….. some disadvantages Preparation Suitability – what will investors look for? Liquidity Board Composition Corporate Governance Structure 18-Nov-16

Financing Techniques Equity Debt Others Corporate Retail Bonds PE 18-Nov-16

Financing Technique - Company Factors Influencing Financing Technique - Company Cost of debt and equity Size of fundraising Commercial considerations gearing restrictions share rating impact on earnings 18-Nov-16

Factors Influencing Financing Techniques – Investors/Funders Return on equity Ability of company to offer security cashflow assets structure 18-Nov-16

Equity Finance Rights issue Open Offer Placing Vendor placing 18-Nov-16

Considerations for choosing Equity Fundraising Structure Amount to be raised Reaction of market Certainty of Funds Timing 18-Nov-16

Debt Funding Loan single lender Syndicated loan Debt Securities loan stock (issue to Seller) Listed Bonds (good credit rating, large amounts) high yield bonds (growth companies, high interest rates) 18-Nov-16

Characteristics/Advantages of Debt Securities Broader investor base Tradeable Covenants Interest rate 18-Nov-16

Characteristics/Advantages of Loans Flexibility Currency (James speak later) Publicity Renegotiation Size of Borrower 18-Nov-16

Alternative Finance vs. Traditional Debt Finance Advantages of Corporate Mini-Bonds Raise profile of the brand An additional source of funds Customer engagement loyalty Time and cost Flexibility of commercial terms Potential increase in customer spend Potential Investors: Shareholders Customers General Public Potential disadvantages or issues Certainty of success/amount raised Press attention/reporting Compliance with regulation

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