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건국대학교 벤쳐전문기술 전략적 제휴와 M&A 연구 강의 목표와 계획 강의 목표 Corporate Finance Communication with Equity Investor, including overseas investor Cross border and cultural experience in finance industry 강의 계획 주제의 제시와 토론 평점방법: 출석 40, 강의참여 20, 중간과제물 20, 기말 과제물 20 중간과제물: 투자가 자금유치를 전제로 한 사업제안서 작성 기말과제물: 중간과제물때 제안된 사업내용의 상장 및 인수합병 전략 - Valuation, 인수합병방안 및 대상회사선정, 자금조달 방안, 기관투자가를 위한 Exit 방안, 등등 포함 2 Hans Kim 주제별 강의 계획 1. 기업금융과 IR 9. M&A 1 2. 기업금융과 IR 10. M&A 2 3. 기업의 국내외 상장 11. 적대적 M&A 4. 초빙강사 1: 엔터테인먼트시장 12. Hedge Fund 의 한국금융기관 인수 5. Valuation 1 13. 초빙강사 3 (또는) Investor-state claim 6. Valuation 2 14. 지배구조펀드에 대한 이해 7. 초빙강사 2: Due Diligence 실무 15. 전략적 제휴와 JV 8. 중간 시험 - 과제물 제출 16. 기말 시험 - 과제물 제출 Note: 강의 내용과 순서가 바뀔 수도 있음 3 Hans Kim IPO Why IPO ? IPO 절차와 비용 해외시장 IPO 4 Hans Kim IPO Why IPO ? 5 Hans Kim IPO_ Why IPO?_ Motives of IPO The motives of IPO (Dr. Henry Servaes, 2001) Company needs new financing Current sources of financing have been exhausted (Bank Financing, Venture Capital) Founders want to diversify and cash out partially The increased liquidity in Company stock increases its value The liquidity may also make it easier to do further acquisition; acquisition currency Venture Capitalist wants cash out In the western market, often Venture Capitalist does not sell out and makes distribution to partners after IPO What about in Korean market? Golden Bridge의 대우부품사례 Take advantage of overvaluation in market 6 Hans Kim IPO_ Why IPO?_Case of IPO motives Case of “acquisition currency” and “overvaluation” in the market after IPO 글로비스 (086280) 7 현대차 물류 전문업체 현대차 그룹의 경영권 상속을 위한 상장이라는 견해? Hans Kim IPO_ Why IPO? _Disadvantage of IPO Why MNCs in Korea tend to go back to Private company after acquiring public company ? Going public is a costly process Cost of IPO North America 7% Europe 3.59% (931 IPOs 1992 – 1999) Asia Pacific 3.09% (430 IPOs 1992 – 1999) Korea ?? Under pricing 예컨대, 시장시초거래가 117$ 공개가 100$ 증권사 비용 지불 이후 가격 93$ 기타 비용 지불 이후 가격 90$ = 회사가 실제 조달한 몫 = 결국, 시초가 117$ 보다 27$ 이나 적은 가격 Cost of managing the status of public company Cost of Human resources for IR activity Management cost of maintaining the share price properly Vulnerable to control contests Increased disclosure Diversified shareholder structure 8 Hans Kim IPO IPO 절차와 비용 9 Hans Kim KOSPI Information 10 Hans Kim Lead Manager’s role 11 Hans Kim Listing requirement and issues Major listing issues Listing requirement & issues 12 Hans Kim Listing Requirement & Issues 13 Hans Kim Listing Requirement & Issues 14 Hans Kim Listing Requirement & Issues 15 Hans Kim Listing Requirement & Issues 16 Hans Kim Listing Requirement & Issues 17 Hans Kim Listing Requirement & Issues 18 Hans Kim Listing Requirement & Issues 19 Hans Kim Listing Schedule & Cost 무상증자의 의의 20 Hans Kim 코스닥 _ 주요 업무 일정도 21 Hans Kim Listing Schedule & Cost 무상증자의 의의 22 Hans Kim IPO_ 코스닥 상장 절차 _코스닥위원회, 심의결정원칙, 유형별 기준 코스닥 등록의 의의 증권업협회가 비상장법인중 일정한 요건을 구비한 회사에 대하여 증권회사의 신청에 의하여 협회중개시장의 매매 대상물로 승인하는 행위 코스닥 위원회 협회중개시장의 운영기준, 협회등록 심의 & 취소, 불성실 공시법인 제재등 심의 의결 1인 상임위원 + 10인 비상임 위원 ( 학계대표 등 전문가 5 + 협회임원 1+중소기업진흥공단임원 1+등록법인중 벤쳐기업대표 1 + 기관투자자 대표 1 + 중개회사임원 1) 심의 결정 원칙 외형요건 (협회중개시장 운영규정 제 4조 1항 1호 및 15호) 에 대한 심의결정기준 질적 요건 (운영규정 제 4조 1항 16호) 에 대한 심의 결정 기준 구분: 승인 및 기각 구분: 승인 및 재심의, 보류, 기각 심의결정 유형별 기준 승인 협회중개시장 운영규정에서 정하는 협회등록 심사요건을 구비하고 있다고 판단되는 회사 재심의 협회등록 질적 심사요건 중 특정부분에 대한 추가적 검토 & 확인이 필요하다고 판단되는 회사 보류 질적 심사요건 중 미흡한 사유가 있다고 판단되나 단기간에 그 충족여부의 확인이 가능한 회사 기각 외형요건 미비 및 심사요건 중 결격사유 있다고 판단되나 단기간에 그 해소가 불가능한 회사 23 Hans Kim IPO_ 코스닥상장 심사 요건 코스닥 등록 심사 요건 협회등의 홈페이지 참고 및 별도 참고 자료 검토 등록예비심사 미승인 사례 사업성검증미흡 매출규모 미미 주요제품의 매출 중단 직전 사업 년도 매출 50%차지하는 사업부문의 매출 중단 주요매출처의 불확실성 직전 사업 년도 매출 77% 차지하는 수요처의 재무내용 부실 직전사업연도에만 매출급증 직전 사업 년도 매출급증 (300%) 이 단일 건에 52% 의지 신규사업에 대한 불확실성 신규사업이 매출의 80%로 미래 불확실성 존재 수익성 검증 미흡 당해1/4분기 주력사업 매출 10억에 분기손실 2억 시현 관계회사 위험에 노출 직전 사업 년도 관계사 부채비율 2,600% 재무안정성 미흡 직전 사업 년도 유동비율이 동업계 평균 50% 미만 재무자료 신뢰성 미흡 매출채권 관련 위험 최근 3년간 매출채권 및 재고자산의 지속적 증가 매출채권이 자기자본의 356%, 재고자산이 자기자본의 466%) 경영의 투명성 미흡 임원 부도, CB를 대주주에게 저가 매도, 유증 대금 대주주에 대여 24 Hans Kim IPO_ 코스닥상장 심사 요건_ 통계자료 25 Hans Kim IPO_ 유 / 무상 증자 해설 유 / 무상 증자 해설 유상증자 일반 공모 증자 제 3자 배정 유상증자 무상증자 26 Hans Kim IPO_ 유 / 무상 증자 해설 유상증자 일반 공모 증자 제 3자 배정 유상증자 무상증자 유상증자의 의의 발행된 신주의 대가가 회사내로 납입됨으로써 회사재산이 증가하며, 발행 신주가 제3 자에게 인수되는 경우 회사의 구성원 (주주) 수도 증가 인수방법에 의한 유상증자의 분류 주주배정방식 신주 인수권을 구주주에게 부여 가장 일반적 주주우선 공모 방식 주주에게 우선 배정하고 실권된 주는 공모하는 방식 유상증자란 주식회사 성립 이후에 자금조달의 목적으로 정관상 발행예정주식총수의 범위내에서 미 발행주식을 발행 하는 것 일반 공모 증자 방식 제3자 배정과 같이 기존주주배제하고 일반 불특정다수인을 대상으로 공개모집방식으로 유상증자실시 IPO 가 이에 해당 제 3 자 배정 정관 또는 주총 특별결의 사항 기존 주주 배제 하고 특정 제 3자에게 배정방식 외자유치의 일반적 방식 경영권 및 기존주주에 영향 발행가에 의한 유상증자의 분류 액면가 유증 방식 정관에 정한 액면가 기준으로 하는 유상증자 시가발행 방식 증권시장에 형성된 주가에 연계하여 유상증자 액면미달 발행 방식 자본충실원칙(상법330조) 에 따라 할인발행은 엄격히 금지 회사의 어려운 경영상태로 자금조달이 긴박한 경우에 한해 엄격한 요건아래 허용 27 Hans Kim IPO_ 유 / 무상 증자 해설 일반 공모 유상증자 일반 공모 증자 의의 구주주의 신주 인수권을 배제하고 신주 전량을 일반투자자를 대상으로 공모하는 방식 제 3자 배정 유상증자 발행가액 결정 무상증자 할인율 100/30 이내 결정시점 청약일전 제 5 거래일을 기산일로 결정 계산식 발행가 = 기준주가 X (1- 할인율) 기준주가 MAX {1 달 거래가중평균종가, 1 주 거래가중평균종가, 기산일 종가} 제 3 자 배정 유상증자 의의 회사 정관에 따른 신주인수권 배제 별도 규정 또는 주총 특별결의 사항 회사 의 합작선등 특별관계에 있는 자에게 신주 인수권 부여 외자유치 경영권 분쟁시 우호세력 확보 발행가액 결정 할인율 100/10 이내 결정시점 유증 이사회 결의일을 기산일로 결정 계산식 발행가 = 기준주가 X (1 – 할인율) 기준주가 MIN {(1 달 거래가중평균종가 + 1주 거래가중평균종가 + 기산일 종가) /3, 최종일 종가} 28 Hans Kim IPO_ 유 / 무상 증자 해설 유상증자 일반 공모 증자 제 3자 배정 유상증자 무상증자 무상증자의 의의 자본금으로 변하는 준비금을 액면으로 나눈 수 만큼 신주 발행하는 증자 발행된 신주는 구 주주에게 소유 주식 비율로 비례해서 배분 무상증자의 목적 회사의 자본구성을 시정 사내 유보규모의 적정화 주주에 대한 이익의 환원 주식의 유동성 확보 자본금 증가를 통한 대외 신용도 제고 무상증자의 재원 회사의 순자산에는 아무런 변화 없이 준비금의 일부 또는 전부를 자본금으로 변하는 대차대조표 상의 항목변경에 불과 법정준비금 이익준비금, 자본준비금, 재평가적립금 등 결의기관 이사회 결의로 가능 법정준비금이 아닌 임의 적립금을 이익준비금으로 항목 변경하여 무상 증자 할 때는 주총결의 필요 29 Hans Kim IPO 해외시장 IPO 30 Hans Kim 1 Overview 31 Hans Kim Overview of Capital Markets A Share Private Equity Domestic B Share Listing Big Red Chip Small & Medium Board Company Direct Listing Hong Kong Main Board Big H Share GEM Small Red Chip Overseas Singapore Listing Indirect Listing United Kingdom Small H Share (Reverse Takeover) United States 32 Hans Kim Key considerations for selecting listing location Growth strategy / In selecting a listing location, companies should consider corporate strategy and how the listing location would impact corporate image What’s the likelihood of a successful IPO? Can it be completed in a relatively short time horizon? Is the valuation fair (especially compared to other similarly listed companies)? Is the amount raised enough to fund corporate development needs? Cost of raising equity (underwriting fee, listing fees, lawyers, auditors, evaluation, PR, printing costs), and cost of maintaining a listing, including internal controls, financial reporting and satisfying local regulations How easy is it to access the capital markets through a follow-on offering and the usual amount of a follow-on offering reputation Listing requirements / processing times Valuation / PE / Fund raised Cost of listing Follow on offerings 33 Hans Kim International markets comparison AIM HK Main Board GEM Singapore Stock Exchange NASDAQ Financial requirements None High Low Medium High Operational requirements None High High Medium High Minimum market capitalization None US$24m (HK$200m) US$5.9m None US$8m free float Time required to list 3mth – 6mth 6mth – 9mth 6mth – 9mth 6mth 12mth Listing cost (ex-commission) US$0.45m (GBP0.25m) US$1.2m (HK$10m) US$1.2m (HK$10m) US$0.75m (S$1.25m) US$0.6m Monthly liquidity (Turnover / market capitalization) in 2004 7% 77% 3% 14% 24% Number of Chinese companies listed 15 173 45 88 24 (8 IPOs, 7 reverse takeovers) Source: PwC, BDA research Data as of December 2005 34 Hans Kim 2 Hong Kong Listing 35 Hans Kim Hong Kong listing (Main Board) – listing requirements Financial capability Candidate must fulfill one of the three tests in order to satisfy the financial attributes requirement: Profit: Not less than US$2.6m (HK$20m) for the most recent year; AND Profit: Not less than US$3.8m (HK$30m) in aggregate for the 2 preceding years Market capitalization / revenue test Market cap: Not less than US$513m (HK$4bn) at the time of listing; AND Revenue: Market capitalization / revenue / cash flow test Market cap: Not less than US$256m (HK$2bn) at the time of listing; AND Revenue: Not less than US$64m (HK$500m) revenue from principal activities for the most recent financial year; AND Cash flow: Not less than US$13m (HK$100m) inflow from operating activities in aggregate for the 3 preceding financial years Profit test Not less than US$64m (HK$500m) revenue from principal activities for the most recent financial year; AND Ownership and management continuity Maintain a trading record period of not less than 3 financial years; AND Demonstrate management continuity during the 3-financial-year trading record; AND Demonstrate ownership continuity and control for at least the most recent financial year of the trading record * Listing applicant under the market capitalization / revenue test (above 2nd one) is not subject to the management and ownership continuity requirement Maintenance requirements Minimum market capitalization of: US$24m (HK$200m) Minimum public float: 15% - for market capitalization between US$513m (HK$4bn) and US$1.3bn (HK$10bn) 25% or US$12.8m (HK$50m), whichever higher - for market capitalization below US$513m (HK$4bn) Minimum number of shareholders: 300; 1,000 – for applicant under market capitalization / revenue test (above 2nd one) 36 Hans Kim Hong Kong listing (Main Board) – pros and cons Cons Pros High listing cost Geographical proximity, common language and common culture Traditional fund raising platform for China Since Qingdao Brewery listed in Hong Kong tock Exchange in 1993, Hong Kong Stock Market has become the most important offshore listing platform for Chinese companies. There are now over 170 Chinese companies (H share and red chip) listed in Hong Kong Chinese companies are now a major part of the Hong Kong Main board. In 2005, Chinese companies contributed 30% of market capitalization and 40% of market turnover respectively Experience and market size attracts good broker coverage. Concentration of institutional investors and fund houses also ease fund raising The average IPO cost (ex-commission) is about US$1.2m (HK$10m). It is expensive relative to other stock exchange, such as US$750,000 for Singapore Stock Exchange and US$450,000 for AIM Buying exiting listed company is another way of listing. Average “shell” price is approximately US$6m (HK$50m), which is also expensive relative to other markets Relatively high entry barrier Listing on the Main Board requires fulfillment of certain financial thresholds not required in other stock listings Relatively long listing procedures Good liquidity and strong post IPO fund raising capability Market liquidity makes secondary listings possible and reduces the need for dual listings In 2004, turnover / market capitalization ratio was 77%, compared with 7% for AIM and 9% for SESDAQ (Singapore Stock Exchange) Between 2001 and 2005, over 54% of fund raised by red chips was from secondary offerings 37 In light of the recent corporate scandals, Hong Kong Stock Exchange has toughened the approval process for IPOs Listing procedures now takes about 6-9 months to complete, compared to 3-6 months for AIM Hans Kim Hong Kong listing (GEM) – listing requirements Length of business operation Candidate must fulfill either period of active business operations: No minimum financial requirement Revenue: Not less than US$64m (HK$500m) in the last 12 months; OR Assets: Not Less than US$64m (HK$500m) in the last financial period; OR Market cap: Not less than US$64m (HK$500m) with not less than US$19m (HK$150m) held by the public 24 months 12 months Exemptions may be granted for mining companies and newly formed project companies, such as major infrastructure projects, which can have shorter trade records Ownership and management continuity Must be under substantially the same management and ownership over the period of active business operations Maintenance requirements Minimum of market capitalization: US$5.9m Minimum public float: 20% or US$128m (HK$1bn), whichever higher - for market capitalization exceeding US$513m (HK$4bn) 25% or US$3.8m (HK$30m), whichever higher - for market capitalization less than US$513m (HK$4bn) Minimum number of shareholders 300 – for market capitalization exceeding US$513m (HK$4bn) 100 – for market capitalization less than US$513m (HK$4bn) Financial reporting Quarterly 38 Hans Kim Hong Kong listing (GEM) – pros and cons Cons Pros High listing cost Geographical proximity, common language and culture Relatively low entry barrier Similar to Hong Kong Main Board, listing expense is relatively expensive, approximately US$1.2m in total As market capitalization of GEM listed companies are relatively small, listing cost can comprise up to 20% of total fund raised GEM does not have specific financial requirement for listing candidates; the same is true for other growth markets such as AIM and SESDAQ Poor liquidity Stepping stone to Hong Kong Main Board Good GEM listed companies usually swap to Main Board after accumulating 3-year profit record post GEM listing The first, second and sixth largest GEM listed companies swapped to the Main Board. Altogether there are over 10 GEM listed companies that have swapped to the Main Board Liquidity of GEM is very poor, and deteriorating. Turnover / market capitalization ratio dropped from 6% in 2002 to 3% in 2004 compared to 7% for AIM and 9% for SESDAQ Poor liquidity results in difficulty of post IPO fund raising. Since 1999, post IPO only raised US$129m for Chinese companies Relatively long listing procedures 39 In light of the recent corporate scandals, Hong Kong Stock Exchange has toughened the approval process for IPOs Listing procedures now takes about 6-9 months to complete, compared to 3-6 months for AIM Hans Kim 3 Other listing options 40 Hans Kim Singapore listing – listing requirements Financial capability Candidate must fulfill one of the three tests in order to satisfy the financial attributes requirement: Profit test (1) Profit test (2) Market capitalization test Profit: Cumulative pre-tax profit of at least US$4.5m (S$7.5m) for the last 3 years; AND Profit: Pre-tax profit not less than US$0.6m (S$1m) in each of these 3 years Profit: Cumulative pre-tax profit of at least US$6m (S$10m) for the latest 1 or 2 years Market cap: At least US$48m (S$80m) at the time of the IPO, based on the issue price and post invitation issued share price Trading moratorium Promoters’ entire shareholding at the point of listing for first 6 months after listing (above 1st and 2nd options) Promoters’ entire shareholding at point of listing for first 6 months after listing; and at least 50% for the next 6 moths (above 3rd option) Other listing requirements Minimum public float: 12% - for market capitalization larger than US$595m (S$1bn) 15% - for market capitalization between US$238m (S$400m) and US$595m (S1bn0 20% - for market capitalization between US$178m ($S300m) and 238m (S$400m) 25% - for market capitalization less than US$178m (S$300m) Minimum number of shareholders: 1,000 - primary listing 2,000 - secondary listing Financial position No shortfall in working capital All debts owing by directors, substantial shareholders and companies controlled by directors and substantial shareholders must be settled 41 Hans Kim Singapore listing – pros and cons Cons Pros Deteriorating market reputation Geographical proximity, common language and culture While Hong Kong and NASDAQ have increased scrutiny of IPOs following corporate scandals, Singapore has become more lax to attract Chinese companies leading to increased corporate scandals and loss of market confidence A notorious example is China Aviation Oil, which went bankrupt due to crude oil future speculation. It was once held up by SESDEQ as a model of corporate governance. The loss of reputation has directly impacted the liquidity of the market. Its liquidity is only about one-fifth of the Hong Kong Main Board Relatively low entry barrier compared with HK Main Board Singapore requires lower profit or market capitalization for listing Popular with companies that don’t want to list on growth markets like AIM or GEM, but are barred from Hong Kong Main Board due to its high financial requirements Ease of secondary offering procedures Secondary offerings are usually completed in 2-4 weeks 42 Hans Kim NASDAQ Listing – listing requirements Financial capability Candidate must fulfill one of the three tests in order to satisfy the financial attributes requirement: Marketplace Rule 4420(a) Marketplace Rule 4420(b) Marketplace Rule 4420(c) Market cap: At least US$8m for public shares; AND Equity: At least US$15m; AND Profit: At least US$1m pre-tax income Market cap: At least US$18m for public shares; AND Equity: Market cap: At least US$20m for public shares; AND Assets: At least US$75m; OR Revenue: At least US$75m; OR Market cap: At least US$75m At least US$30m Alternative – NASDAQ Small Cap Market Market cap: At least US$5m for public share; AND Equity: Market cap: At least US$50m; OR Profit: At least US$5m; OR At least US$750,000 from continuing operations, in last fiscal year or 2 of the last 3 fiscal years Ownership and management continuity 2 years operating history is required for listing by fulfilling Marketplace Rule 4420(b) 1 year operating history is required for listing on the NASDAQ Small Cap Market. It can be waived if the market cap is greater than US$50m Maintenance requirements Continuing listing requirements: Equity > US$10m + publicly held share value > US$5m + min US1 share price; OR Market cap/assets/revenue > US$50m + publicly held share value > US15m + min US$1 share price Market maker: 3 market makers are required Marketplace Rule 4420(c): 4 market makers are required Minimum number of shareholders: 400 each holding 100 or more shares NASDAQ Small Cap Market: 300 each holding 100 or more share Sarbanes-Oxley Act: Substantial requirements 43 for corporate governance Hans Kim NASDAQ Listing – pros and cons Cons Pros Heavy compliance cost The largest growth market with good liquidity NASDAQ is the largest growth market in the world. Its capitalization reached US$3,153bn in 2004, which is 70x AIM and 346x GEM In 2004, monthly turnover / market capitalization ratio was 24%, compared to 7% for AIM and 9% for SESDAQ These market characteristics favor large scale fund-raising Of the 23 Chinese listed NASDAQ companies, many are tech-concept stocks, including: Baidu, Netease, Sohu, Sina, Asia Info, UT Starcom, China.com and Kongzhong.com While Asian stock markets are less keen on tech concept stocks, NASDAQ provides a platform and relatively higher PE for these companies Sarbanes Oxley (SOX) has placed a heavy burden on US listed companies According to research by AeA, for a company with revenue less than US$100m, SOX compliance can cost more than 2.5% of revenues High litigation risk Friendly to high-tech concept stocks Out of 23 Chinese listed companies, 7 have been sued Litigation costs and compensation/fine can pose a severe threat to the financials of the listing company Relatively high continuing listing requirement The continuing listing requirement is clearly far stricter than other growth markets, especially the minimum market cap and share price The number of companies listed on NASDAQ have decreased due to strict continuing listing requirements From 1995 to 2002 there were 5,143 NASDAQ delistings compared to 1,497 NYSE delistings and 712 AMEX delistings Long listing procedures 44 Listing on NASDAQ normally takes 1 year to complete, which is more than twice the time required for AIM listings Hans Kim AIM – listing requirements AIM has neither financial nor operational requirements for listing candidates Advisors required to list on AIM NOMAD (Nominated advisor) NOMAD warrants to the Exchange that the candidate is appropriate for joining AIM NOMAD has to be retained throughout the company’s life in the market Broker A securities house and member of the LSE It is the broker’s responsibility to gauge the level of interest in the company’s shares and advise on pricing, and place them with investors Accountant Corporate lawyer Review and audit the candidate’s finances Draw up all agreements surrounding the flotation. They are also responsible for the due diligence process – verifying statements in the prospectus and other documents Financial PR company Responsible for promoting the company, helping creating the analyst presentation, afterwards advising on investor relations strategy Documents required to list on AIM Prospectus Due diligence report Analyst presentation 10 day announcement – the form is completed by the NOMAD and sent to the AIM, at least 10 clear business days prior to admission of the new company. AIM then disseminates this over the Regulatory News Services, the LSE’s official news outlet, and checks for any material objection for the listing Declaration by NOMAD Application form signed by the company 45 Hans Kim AIM – pros and cons AIM is a new market for Chinese companies with the first listing in October 2004, but is rising in popularity Cons Pros Geographical disadvantage Very low entry barrier AIM has no financial or operational requirements for listing London is geographically far from China. popularity of shares Simple listing procedures and short listing process NOMAD are mostly western corporate finance companies. Language and cultural differences may lead to difficulty, and result in the need for additional advisors LSE relies on the NOMAD to warrant the listing company, thus simplifying the listing procedures. Admission documents are only pre-vetted by the NOMAD After appointment of the NOMAD, it normally takes only 3-6 months to get listed on AIM Lack of popularity in Greater China area Low listing cost Culture unfamiliarity may affect Listing costs on AIM is about US$450,000 (GBP0.25m, ex-listing commission), compared to (US$1.2m) listing in Hong Kong and (US$750,000) in Singapore AIM was set up in 1995, but there are now only 17 Chinese companies listed there; Chinese listings only started in October 2004 Lack of popularity in China has reduced some of the advantages of being listed, such as reputation enhancement, however this is improving as AIM hosts road shows etc to raise its profile Relatively strong liquidity among growing markets Monthly turnover / market capitalization ratio for AIM was 7% in 2004, improving from 3% in 2002. AIM index was up by 20.4% in 2004 It is far more attractive than 3% of GEM and approaching 9% of SESDAQ Flexible trading No minimum public shareholdings In most cases, no prior shareholder approval is required for transactions 46 Hans Kim Chinese enterprises listed on AIM Name Ticker Sector Sinosoft Technology SFT Software Bodisen Biotech BODI Agricultural Biotech China Shoto PLC CHNS Batteries/Battery Sys Listing date Current market cap Listing market cap Listing method (GBP in m) (GBP in m) 06 March 2006 58.8 NA IPO 06 February 2006 158.9 NA IPO 06 December 2005 38.0 26.0 IPO Mandarin Merchant Capital PLC 620534Z Investment Companies 16 September 2005 NA NA IPO EBT Mobile China EBT Cellular Telecom 08 September 2005 51.8 26.5 RTO Asian Citrus Holdings Limited ACHL Agricultural Operations 03 August 2005 141.7 68.0 IPO Jarlway Holdings PLC JWY Machinery-Constr&Mining 18 July 2005 3.8 6.0 IPO South China Resources PLC SCR Metal-Diversified 18 April 2005 38.5 4.0 IPO Sweet China PLC SWC Capital Pools 31 March 2005 NA NA RTO Central China Goldfields PLC GGG Gold Mining 30 March 2005 12.5 NA RTO Ming Resources PLC MTA Investment Companies 29 March 2005 2.3 NA RTO SovGEM Limited SOV Investment Companies 23 November 2004 4.3 11.4 IPO China Wonder Limited CWO Diversified Operations 01 October 2004 3.8 2.5 IPO GruppeM Investments PLC GRP Investment Companies 18 February 2004 NA NA RTO Hemisphere Properties PLC HPE Real Estate Oper/Develop 05 August 2003 0.8 2.5 RTO CYC Holdings PLC CYC Investment Companies 08 April 2003 2.8 NA RTO Churchill China CHN Consumer Products-Misc 26 October 1994 NA NA IPO Source: Bloomberg, BDA research Data as of 10h May 2006 47 Hans Kim Key Advantage of LSE AIM - Normally 3 year trading record required - No trading record requirement - Minimum 25% shares in public hands - No minimum market cap. - Prior shareholder approval required for substantial acquisitions and disposals - No minimum shares to be in public hands - No prior shareholder approval for transactions - Minimum market capitalization 48 - Nominated adviser required at all times - SME Business 에 적합 Hans Kim Key Advantage of LSE AIM NASDAQ에 비해 상대적으로 등록 Regulation이 중소기업에 유리한 조건을 가지고 있어, 상장조건이 수월하며 매년 상장되는 기업의 수가 많다. (UK외 International기업의 상장기회가 많다.) -KOSDAQ이나 - 등록 및 유지 비용이 NASDAQ보다 훨씬 저렴하고, KOSDAQ보다는 다소 비싸다. - Pound화의 변동추이가 원화보다 작다. - KOSDAQ에 비해 PER가 높다. -> 회사가치 대비 보다 정확하고 효율적인 Valuation 이 가능하다. - Open-end Fund Raising이 활발하고, 1차보다 2차의 Raising 규모가 크다. -> 회사의 지속적인 성장이 가능하다. - 유럽에서 기업의 Name Value가 높아져 시장 진출이 용이하다. - Market에서 지정한 전문적인 Underwriter들 (Nomad) 이 있다. 어드미션이나 IPO후, 회사의 가치를 부양해주며, 경영에 도움을 줄 수 있다. - IPO시 대주주의 지분이 Dilution 되는 정도를 조절할 수 있다. : 보통 코스닥 상장시 대주주 지분이 40%정도 Dilution되는 것이 일반적이지만, AIM은 5%정도로 조절하는것이 가능하며, Equity뿐 아니라 싼 이자의 Debt로도 Funding을 받을 수 있다. - M&A고려시 코스닥보다 AIM에 상장되어 있는것이 여러측면에서 유리하다. - AIM시장은 기관투자가들이 메인이 되는 시장으로, Fluctuation이 심하지 않고, 지속적으로 꾸준한 성장이 가능하다. 49 Hans Kim KOSDAQ & AIM – 상장조건 비교 구분 Kosdaq (벤처기업 기준) AIM 자기자본 15억원이상 규정 없음 자기자본이익률 (ROE) * 5% or 순이익 10억이상 규정 없음 소액주주500인 이상, 주식의 분산요건 규정 없음 발생주식총수의 30% 이상 소유주 비율 변동 청구일전 1년 이내 변동 없어야 함 규정 없음 심사자 Kosdaq 위원회 Nominated Advisor 등록 주관주체 증권회사 Nominated Advisor & Broker 50 Hans Kim AIM, NASDAQ, KOSDAQ – 상장및 유지 비용 등록비 증권거래소 수수료 LS E A IM N ASD AQ KO SD AQ N om ad/회계/법률등 비용 등록 유지비 $8,000 연간 수수료 IP O 시 B ro ker 비용 주식거래비용 기타 공모규모의 3% ~ 6% 거래세: 0.5% 수수료:$7~ $100 + 소득세 40M share기준 공모규모의 ~ 7% 수수료: $6~ $15/trade + 소득세 자문비용 추정치사용 (S arbanes-O xley 법 고려) 공모규모의 2.5% ~ 4% 거래세: 0.3% 수수료: 0.05~ 0.2% 40M share기준 $8,000 $900,000 N om ad/회계등 연간비용 $145,000 총계 $908,000 총계 $153,000 수수료 $125,000 연간 수수료 $34,500 회계/법률등 비용 $2,000,000 회계/법률등 연간비용 $1,000,000 총계 $2,125,000 총계 $1,034,500 수수료 $10,000 연간 수수료 $500 회계/법률등 비용 $100,000 회계/법률등 연간비용 $50,000 총계 $110,000 총계 $50,500 51 Hans Kim Market 비교 2005 년 기준 증권거래소 등록 기업수 (누적) M arket C ap (누적) 거래규모 Total IP O 금액 S econd R aising A ve. Fund R aising 신규등록기업수 LS E A IM 1399 (1179/220) $113B $84B $13B $5B $34.7M 519 (399/120) N ASD AQ 3164 $3603B $10000B $12.2B NA $87.8M 139 KO SD AQ 918 $70B $437B $3.7B $2.2B $53.6M 69 2006 년 10월 25일 기준 증권거래소 등록 기업수 (누적) M arket C ap (누적) 거래규모 Total IP O 금액 S econd R aising A ve. Fund R aising 신규등록기업수 LS E A IM 1590 (1307/208) $150B $88B $12.6B $8B $62.4M 330 (244/86) N ASD AQ 3206 $3,670 $8777B 42 KO SD AQ 954 $68B $351B 37 52 Hans Kim AIM _ New Touch Guideline for AIM Nomads_Feb 19, 2007 From The Times February LSE The wording of a key declaration to be published on the front page of admission documents, assigning to nomads the responsibility for the “appropriateness” of AIM applicants, is expected to be tempered. 19, 2007 draws up new tough guideline for AIM nomads The London Stock Exchange is expected to publish strict guide-lines this week for advisers bringing companies to AIM, the junior London market. Baty, a nominated adviser and assistant director of corporate finance at Hanson Westhouse, said: “We don’t expect the new rules to be too prescriptive. The whole point of AIM is that it is regulated by the nomads. The spirit of the rulebook is that the nomad uses their judgment.” In Although Elizabeth Richard Colman an attempt to make the industry more accountable, the first tangible rulebook for nominated advisers, or nomads, will demand that more thorough due diligence be carried out on AIM applicants. AIM applicants are required at present to show legal and accounting diligence, the rulebook will require nomads to prove to AIM regulators a knowledge of the company and its directors. This will present a particular challenge in emerging markets such as China and India, and the crackdown is expected to provide a boon to business intelligence services. Proposed rules include the demand for strict background checks on all directors and site visits to the headquarters of nonUK companies. Failure to comply with the rules could lead to a nomad being banned from AIM. The crackdown follows a string of profit warnings involving AIM-listed companies and criticism from the US about so-called lax standards. Russ Corn, a consultant at Diligence, an intelligence gathering and risk management firm, has noticed an increase in business. He said: “There is a feeling among the nomads and the brokers that they will be required to look at every single director that they’re bringing to market and that they validate and check the directors’ declarations and the essential information that they’re given. Up until now the nomad could get away with taking it at face value. Now they’re going to have to do reputation and integrity profiling.” Under the present AIM structure, nomads are not subject to hard-andfast rules. “This is an attempt to show the world that the AIM is taking a tougher approach,” one nomad said. However, many larger nomads said they already complied with the “best practice” standard set out in the rulebook. The rules are expected to weed out smaller nomads which “rubber-stamp” applicants’ admission documents and neglect to stay in touch with the company after listing. Several nomads welcome the rules, saying they will provide an impetus to tell clients that they must do background checks, in circumstances where it may have caused offence. Previously, many nomads carried out such checks without the applicants’ knowledge. 53 Hans Kim 4 Private placement 54 Hans Kim Private placement – overview Overview Private placement is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market There are two types of private placement investors; financial and strategic Financial investors, including venture capital, are an important source of funding, especially for younger companies that do not have access to the public financial markets Strategic investors provide management and technology know-how and capital Private placement Financial investors (private equity) Who they are Strategic investors (strategic stake) Venture capital Strategic partners (foreign or domestic) Buyout funds Funds of funds, etc. Upstream, downstream or otherwise related companies Companies looking to diversify Gain access to new markets Ensure steady supply or off-take or other benefits from equity ownership Diversify earnings, participate in other industries Good financial returns on their equity investment and typically exit around 5 years What they want 55 Hans Kim Financial investors – overview Sources of private equity (by number of funds) Fund o f Fund 9.5% Others 5.3% M ezzanine 6.4% Three stages of private equity Seed/initial stage: Investors investing in companies during this stage are investing in an idea. A company at this stage usually has a concept or a prototype or has just started operating, but operating practices and company structure have not been determined. Investing in companies at this stage is relatively risky and is usually funded by venture capital. Typical investment amount range from US$1m to US$5m. Growth stage: A company in this stage has usually operated for a period of time, has a basic sales team, production capabilities and has in place a basic company structure. A company in this stage needs capital to expand operations and grow market share. Typical investment amount range from US$5m to US$40m Mature/mezzanine stage: A company in this phase is mature and is getting ready for a public offering in 9-12 months time. Finding a strong and reputable private equity investor in this stage will add credibility to the public offering. Investment at this range widely, anywhere from US$40m to US$300m Buyout – LBO/MBO: There are many different circumstances or events that may facilitate the initiation of a management buyout (MBO), a form of leveraged buyout (LBO), including: divestitures of corporate divisions, public-to-private transactions, SOE restructurings, and other means of transferring ownership of a company. MBO transactions usually rely on debt instruments to finance a significant portion of the purchase price, consequently, the majority of these types of deals occur in stable, mature companies that have an established track record of generating strong and sustainable cash flows. These categories are not absolute, but are a useful guide in helping to target the appropriate kind of investor Venture Capital 37.3% Seco ndary market 5.1% B uyo ut 36.4% Source: Almeida Capital, BDA Sources of private equity (by amount) Others Fund o f Fund 5.2% 6.8% M ezzanine 6.5% Seco ndary market 4.5% B uyo ut 44.7% Venture Capital 32.4% Source: Almeida Capital, BDA 56 Hans Kim Private equity – pros and cons Management should carefully review all its options and considerations before committing to raising capital through private placement Cons Pros Financial Investors Strategic Investors “Smart money”: Private equity can often bring better management practices and connections within the industry to improve the business Lots of new PE funds looking at China Flexible fundraising channel: compared to a public offering, the private placement process is less time consuming and more flexible. It also avoids the registration, regulation and control process and offers more confidentiality against competitors Financial investors will typically want to exit their investment in 3-5 years The public market will often give a more generous valuation than a private placement investor Loss of control: Contract stipulations, board member requirements, and other issues that arise out of the investment process could lead to loss of control by management Eliminates marketing and road show costs Private placement is more accessible than the public markets with a higher likelihood of success Unlike a listed company, shares employees can’t be freely traded Legitimacy: Investment by a reputable private equity fund or company can often provide encouragement to would-be future investors as it implies that the company’s financials and its business model have passed rigorous evaluation by highly qualified people. It can also raise the profile of a company waiting to list publicly and increase its valuation and enhance its performance in the secondary markets It is harder for a private company to use un-issued shares in an acquisition given the unconfirmed value of the shares Strategic partners can use capital support to solidify the business partnership Strategic investors can bring technology, market access and best business practices to the Company Working with another company will require careful relationship management to align expectations and have a fruitful relationship 57 owned by Hans Kim IPO End of Week 3 58 Hans Kim