Ideas For Corporate Development Phil Adaptation
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Transcript of Ideas For Corporate Development Phil Adaptation
Pachira Capital PhilippinesCapital-Raising
Advice on company structureNegotiations with capital sourcesDefending company’s best interests
Alexander Gilles (clients, connection to Canada)
Bong Tandoc (banks, credit rating agencies)Gary Davies (connection to Australia)
capital-raising consultants2
20-year old distribution company
• Now has 200 employees.• Seeking paths to growth
• Humble beginnings in 1980s
• One-man show
3capital-raising consultants
Life cycle of the company
Daring Investmen
t
Daring Investmen
t
Struggle to SurviveStruggle
to Survive
Aggressive
Expansion
Aggressive
Expansion
Handover to next
generation
Handover to next
generation
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Needed: Mature Managers
Handover to next
generation
Handover to next
generation
Founder has left the reins of operational control to new generation of young managers.Young managers are still trying to get used to the challenges of the job.
• COMPANY Has achieved a high level of growth. But:
• Growth seems to be tapering off ?
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Needed: A strategy for growth
This has been
achieved, so far
This has been
achieved, so far
Here is the potential for the future.
Here is the potential for the future.
Find a Path
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Additional Investment is needed.
This may require additional capital: To open new marketsTo refine management systems
To realize the
potential of the
company
To realize the
potential of the
company
7capital-raising consultants
Sources of Capital
LONG-TERM FINANCIAL PARTNERS
OrSTRATEGIC PARTNERS
Drivin
g Fo
rce:
new
MARKETS
MATURE
MANAGERS
8capital-raising consultants
Financial partners can give valuable connections to new markets. Strategic partners can provide hands-on management via a “stable” of mature managers.
Sources of Capital
FINANCIAL PARTNER: infuses
SMALL capital
STRATEGIC PARTNER:
Infuses BIG capital + know-how + new
markets + experienced managers
He receives 20% or 40% of company
shares. He sits on the
Board of Directors.
He receives 60% or 80% of company
shares. He becomes the new Chairman
of Board.
Current management team directs operations
Take-over by STRONG TEAM OF mature
managers
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In case of financial partner
• Financial partner sits in the board of directors as minority shareholder with a vote. He asks questions and provides advice.
• Financial partner does not OPERATE the company, does not provide new managers, does not introduce new technology.
• Financial partner may be a private-equity fund that will ask you to list Your Company shares on a stock exchange (perhaps in Australia or Canada) within five years.
Your Company receives CASH and advice.
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In case of:
• Your company may become a subsidiary of a large Asia-wide or Global Company.
• Your company may give 60 or 80% or more, of its shares to the PARTNER.
• Your Company receives CASH or SHARES of STOCK in the Global Company, which are equivalent in value, to the capital that will be infused in Your Company.
He will take over Operations.
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Objective is: a Fair exchange for your company
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Time Line : six monthsSearch for the right long-term partner
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Private-equity FUNDs in ASIA have billions of dollars to invest, in companies, that can present a good case, for equity
partnership.
Compensation for the arrangerSmall percentage of the money raised. Or : Small number of shares in Your Company.
Shares of stock, which can be sold in the open market for cash.
Bonds that are convertible to shares of stock. Bond yield = higher than the usual interest rate.After some months, one bond can be converted to ten
shares of stock. Warrants which can be exercised, or traded.
Warrants: give me the right to buy the shares at a fixed price. Then I can take the shares and sell them on the open market for the (higher) market price.
I can also sell the warrant to somebody else for a higher price.
Small operating budget: reimbursable expenses.
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ArrangerSandy Gilles and contacts:
StockbrokersPrivate-Equity FundsVenture-Capital FundsFinancial Advisers. Consultants.
Global reach. Local Touch.
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