Lecture 2 - Equity Capital Markets (Part 2)

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1、Lecture2:EquityCapitalMarkets–Follow-onOfferingRoseKay1Agenda•Introductiontofollow-onoffering•Typesoffollow-onofferingPlacing–Placing–PlacingandTopupSubscription–RightsIssues2INTRODUCTIONTOFOLLOW-ONOFFERING3WhatisaFollow-onOffering?•Afollow-onofferingisacommonstockissuanceforapubl

2、icly-tradedcompany•Canincludebothprimaryandsecondaryshares4PrimaryvsSecondarySharesMeritsConsiderationsPrimaryshares
Raisescapital
Mostexpensivecostof
Balancesheetfriendlyfinancing
Increasespublicfloat
CouldbedilutivetoearningsSecondaryshares
Liquidityeventforinitial
Couldbeseenby

3、investorsinvestorsasalackof
Increasespublicfloatconfidencebyinsiders
Diversifyinvestorbase
Potentiallyincreasedsharepricevolatility
Retainedholdingsbymanagement-keytomessaging5WhyFollow-onOffering•Debttooexpensive•Strengthencapitalstructure•M&A•FundingforCapex/workingcapital•Refin

4、ancing6LISTINGRULES7TakeoverCode•TheTakeoversCoderequiresageneraloffertobemadetoallshareholderswhere:–Anypersonsacquiresshareswhichcarry30%ormoreofthevotingrightsofacompany;or–Anypersonwhoholds30%ormorebutnotmorethan50%ofthevotingrightsandsuchpersonacquiresinanyperiodof12monthsadd

5、itionalsharescarryingvotingrightsofmorethan2%fromthelowestpercentageheldduringtheperiod•ThegeneraloffermustbemadeatacashpricewhichisnotlessthanthehighestpricepaidfortherelevantclassofsharesbytheofferorwithintheprecedingsixmonthsTYPEOFFOLLOW-ONOFFERINGS9PrincipalTypesofFollow-onOff

6、ering•FurtherissuesofsharesbycompanieswithsharesalreadylistedonastockexchangePre-emptiveNonpre-emptiveRightsissueCashplacingOpenofferVendorplacingPlacingandtopup10SizeofFollow-OnOffering•AverageDailyTradingVolume(ADTV)•PercentageofPublicFloat•PercentageofMarketCap•Company’sneedfor

7、proceeds•Investorappetite11ExecutionAlternativesFullyBlockTradeAcceleratedBookbuildMarketedOfferingDescriptionInvestmentbanksLaunchashortroadshowLaunchalongroadshowpurchaseandre-offerthesharesInfluenceOverInvestorNoSomeYesBaseOpportunitytoMarketNoSomeYesStoryMarketRiskMinimalSomeY

8、es12PLACING13TypesofPlacingTypesC