Equity Financing PDF

Equity financing SILE Part B Course What we’re going to cover 01 Overview 02 Equity financing for private companies 03 Public offe...

Equity financing SILE Part B Course What we’re going to cover 01 Overview 02 Equity financing for private companies 03 Public offer of shares © Allen & Overy LLP | Equity Financing © SILE | Equity Financing Overview Why issue shares? 01 Amount of existing debt 02 Restrictions on borrowing? 03 Availability and cost of debt finance 04 How the buyer's shares are rated © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Common methods of Equity financing ‒ Private investment via subscription agreement ‒ E.g. Venture capital ‒ Public offer of shares ‒ E.g. IPO © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Equity financing for private companies Sources of private equity investment 01 Friends and family fundraising rounds 02 Angel investors 03 Government schemes (e.g Startup SG) 04 Singapore accredited start-up incubators 05 Corporate venture capital investors © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Applicable prospectus exemptions 01 Small offer 02 Offer to no more than 50 persons 03 Offer to accredited and/or institutional investors © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Additional considerations Limit on the number of shareholders Approval of existing shareholders © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Principal documents 01 Share subscription agreement ‒ Sets out terms and conditions of the subscription ‒ Includes warranties as to the state of the company 02 Shareholders’ agreement ‒ Protective provisions for the investors ‒ Certain corporate governance rights ‒ Anti-dilution mechanisms ‒ Transfer restrictions ‒ Exit mechanisms © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Public offer of shares SGX-ST Mainboard Catalist Higher entry and listing requirements No minimum quantitative entry criteria Profitability or market capitalisation requirements Assessment of suitability by approved sponsors © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Key steps for an IPO 01 02 03 04 05 Pre-IPO restructuring Conduct of due diligence Prospectus drafting Submission of listing Submission of the draft (if required) application to the prospectus to the MAS SGX-ST 06 07 08 09 10 Review by and responding Negotiation of legal Registration of Pricing and allocation Admission of issuer to the to queries from the SGX- documentation such as the prospectus with the MAS of shares/units Official List of the SGX-ST ST and the MAS. underwriting agreement and listing and quotation of shares/units. © SILE Allen |&Equity OveryFinancing LLP | Equity Financing  Prospectus Must contain all information reasonably required by investors to make 1 an informed assessment of the shares 2 Prepared by the issuer and its advisers 3 Criminal and civil liability for omissions and misleading statements © Allen & Overy LLP | Equity Financing © SILE | Equity Financing Methods of IPO Marketing 01 Pre-IPO placements 02 Cornerstone investors 03 Roadshows 04 Advertising/other publicity © SILE Allen |&Equity OveryFinancing LLP | Equity Financing Continuing obligations 1 2 3 4 Disclosure of material information Periodic financial reporting Interested person transactions Corporate governance © SILE Allen |&Equity OveryFinancing LLP | Equity Financing  Copyright notice “ Copyright © 2021, Singapore Institute of Legal Education. All rights reserved. This video is protected by the copyright laws of Singapore. No redistribution, reproduction or editing of this video in whole or in part in any form or medium is allowed without the express written permission of the Singapore Institute of Legal Education. “ © SILE Allen |&Equity OveryFinancing LLP | Equity Financing 0010023-0028844 SNO1: 2005385519: 3