Building an IPO project

management team:

DRIVING COMPANIES

TOWARDS SUCCESSFUL

IPOS

Kelvin Ho Chief Financial Officer,

Changjiang Fertilizer Holdings Limited

9 September 2015

2

The Goose Story

3

Content

1. Benefits & Burdens

2. Essentials Before Setting Off

3. Forming Your Team

4. Pre-IPO Tasks

Due Diligence

Prospectus Liability

5. Life After Listing

6. Achieving Listing Success

7. Conclusion

4

Content

1. Benefits & Burdens

5

Benefits and Burdens

+Cash & greater funds access

+Liquidity for investors

+Recruitment and retention of

talent

+Enhanced stature &

perceived stability

+New “currency” for M&A

• Assets Acquisition

• Collateral Security

- Risk of losing

management control

- High initial listing costs &

ongoing expenses

- Draining company time &

resources

- Reduced flexibility in

corporate affairs

- Share price subject to

market volatility

6

Content

2. Essentials Before Setting Off

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Do you have the “right” stuff?

“The IPO did well because

the company is operating in

the right industry which is

related to pharmaceutical,

medical and healthcare.

There is very strong

demand for stocks operating

in the medical and healthcare

sector here.”

- Remisier, Alvin Yong

8

Do you meet the listing criteria?

Operating

Record

Profit

Market

Capitalisation*

*Computed based on invitation price and post-invitation share capital

Option 1 Option 2 Option 3

>= 3 years

>= 3 years

Operating Rev

(actual or proforma in the

latest completed FY)

Min consolidated

pre-tax profit of

at least

S$30million (latest FY)

NIL

NIL

NIL

>= $150Mn

>= $300Mn

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Essentials before setting off

That’s not

the end!!!

10

Essentials before setting off

Is IPO

really for

you?

Can management

participate in the

listing process

without putting the

business

operations at

risk?

Does achieving

additional

milestones help the

company’s listing?

Now or later?

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3. Forming your team

Content

12

The Management Team

ROLE

Making road show

presentations

13

The Board of Directors

Be involved

throughout IPO

process

IDs typically not

involved in due

diligence and

drafting

sessions

Reviewing and

authorizing the

filing of

prospectus

14

Investment Bank

Overall in charge

Role of Issue Manager and Underwriter

Anticipating

potential or

likely issues

Formulating

strategies

SGX’s queries Book-building

Advising IPO

structural

issues

Arranging

road shows

Marketing

offering

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The Company’s Legal Counsel

Assisting with pre-IPO

corporate housekeeping

and IPO preparations

Drafting and ensuring

the prospectus's

compliance

Responding to MAS’

queries

Provide critical advice

to the Company

16

The Underwriter’s Legal Counsel

Assisting

under-

writers

Participating

in the drafting

process

Drafting the

underwriting

agreement

17

The Company’s Auditors

Audited financial statements

&

Advisory for finance related

matters

Company’s

ongoing financial

reporting

obligations

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Others

Financial Printer

Public Relations

Consultant

SGX

MAS

Ancillary

Services

Regulatory

Authorities

19

4. The Pre-IPO Tasks

Content

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Are you ready for the due diligence?

Role:

Are your financials in shape?

How well do you comply with

rules and regulations?

Does the intellectual property

belongs to the Company?

How’s the key contractual

relationships?

21

Prospectus Liabilities

There is false or

misleading

statement in its

prospectus

Failure to disclose

material

information

Failure to state a

new circumstance

Under the Securities and

Futures Act (SFA), an entity is

guilty of making a false or

misleading statement if:

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Content

5. Life after Listing

23

Post IPO Organisation Chart

Audit Committee

Board of

Directors

Remuneration

Committee Nomination

Committee

Share Trading

Policy

Continuing

disclosure policy

Corporate

Communication policy

Risk Management

Policy

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Continuing Listing Obligations

SGX Listing

Manual

Transactions

with interested

person

Continuing

obligations

Continuing

obligations

Financial

Reporting

Corporate

Governance

• Major acquisitions and

disposals

• Change of principle activities

• Shareholder approval

requirements

• Best practice

recommendations

• Majority of these

guidelines are not

mandatory

• SGX applies an ‘if not,

why not’ approach

• Shareholder

approval

requirements

• Publish prescribed financial

reports

• Quarterly, half-yearly basis

• Immediate announcement

• Information reasonably with material effect

on the price or value of its securities

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Achieving Listing

The road to success is

always under construction.

- “Lily Tomlin”

26

Achieving Listing Success

Is IPO really for you?

Begin the preparations

Work on your business plan and financial model

Operate as a listed company

Be realistic

Incentive plans

Assemble the right team and keep them motivated

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Conclusion

“There is nothing quite so useless, as

doing with great efficiency, something

that should not be done at all.”

- Peter F. Drucker

Contact:

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hokelvinkl@outlook.com