Debt transactions

 

You receive a proposal for financing from a bank or several banks, a proposal for a loan, perhaps a syndicated loan, a trade finance line, issue of credit link notes or bonds. The latter relates more to the capital market transaction, which is dealt with assistance of investment banks, or investment departments of commercial banks.

 

We will negotiate and execute transactions of all type of debt instruments; beginning from search for the most suitable commercial banks and law firms for each type of a deal up to the moment of receipt of funds by your company. The benefit to your firm is in obtaining credit facilities with friendlier covenants and at lower cost, which mean less fees and lower interest rates. While working with you, we will extend advice to improve your firm’s risk perception, which is covered a bit later.

 

The services we provide are as follows:

 

 

1. Solely technical and operational advising

 

We give your team expert support to accomplish a successful  transaction. That means we read and analyse loan facility documentation and negotiations results achieved by your specialists and give our opinion thereon. We read all documentation and suggest corrections and point out the weaknesses, and advise how to soften the terms and conditions of a credit facility in your favour. Important to keep in mind, that it is your team who do the execution of the deal, we just give our advice on their efficiency and effectiveness.

 

 

2.  1+ Negotiating directly with banks and lawyers all terms and conditions except interest rate and fees. 

 

In addition to the 1 Article we

 

Execute the entire debt arrangement and coordinate your team work: from negotiating the term sheet to the final point being draw down of funds under the facility.  Directly take part in preliminary negotiations with banks and external law firms. For example, in case of a syndicated loan, we conduct a tender among banks to select Mandated Lead Arrangers for the deal, and external law firms.

 

Work jointly with internal and external lawyers on facility documentation. Negotiate with a bank or MLA banks and soften covenants of the facility and make the facility structure more suitable to your company’s requirements.

 

Extend expert assistance during the life of the facility.

 

 

3. 1+2+ Interest rates and fees negotiation

 

In addition to the above we

 

Decrease the cost of funding through negotiating the lower interest margins and fees. Knowing the market conditions, competitive  positions of each potential creditor, having an extensive banking experience ourselves, we know how banks price risk for loans and other debt deals. Therefore, we, always able to agree with creditors on best conditions the loan market can offer for your company.

 

 

Loan portfolio optimisation

 

Your firm has been growing successfully in the last years. Your focus has been on expanding your business and securing a bright future for your company. The credit facilities that you have obtained from banks have been very helpful in doing so. However, you have not had much time to analyse the terms and conditions of such facilities. Now you can focus on it using our knowledge and expertise.

 

We will help you to harmonise terms and conditions of all credit facilities, and if necessary to renegotiate and refinance them. The benefit for you is that it will result in a lower cost of funding for your firm and better covenants which will allow you more flexibility in expanding your business.

 

The services we provide are as follows:

 

  • Analysis of the banking market and negotiations with creditors

  • Selection of  banks most suited to finance your activities now

  • Negotiations with the selected banks and obtaining new facilities on better terms and at a lower price than your existing funding

 

 

Equity transactions

 

Raising equity is more complex and expensive a process than a debt transaction. Unlike debt deals, which take place regularly, equity arrangements happen rarely and are truly milestones in a company’s development and life of its stakeholders.

 

Consequently, it is of utmost importance that such a deal receives apt attention from your company. We will assist in choosing the most appropriate investment bank (or a few banks) to accomplish the transaction and negotiate with them terms and conditions for their services up to signing of a mandate letter between your company and the investment bank. Further, we will coordinate all activities of your company to finalise and execute the deal.

 

Below we give description of our services in more detail.

 

  1. Selection of investment banks and signing of a mandate letter

    There are quite a number of investment banks that have good track record in the equity field. However, not only name of a bank matters in equity transactions, personalia is of great essence, since all equity deals are unique. Hence, for example, it is important, to know who in investment bank will be a managing director to coordinate the deal. We know with whom and why we should speak about execution of the deal, and will assist in obtaining most beneficial conditions for your firm. Such conditions are set out in the mandate letter.
     

  2. Selection of external firms for Audit and Legal review

    One of conditions to carry out a successful equity transaction is arranging for the audit and legal review for prospective investors made by independent audit and law firms. The choice for such firms depends greatly on the nature and size of the deal. The more the size, the more brand recognition plays role, and the more money one has to pay for their services. We will aid you to define the adequate circle of contenders for such services, bargain fees there for and get most beneficial conditions for your company
    .
     

  3. Create data room and coordinate collection of data there for

    One of essential stages in any equity deal is creation and populating the data room. In a way, it is a secure website, access to which is granted only to potential investors and other participants of the transaction. This data room website contains all information relevant for the deal, it includes incorporation documents, material commercial and financing agreements, financial model of your business and so on, in other words, all what is necessary for an investor to form an opinion about your company. There are a limited number of data room services providers, and hence, our main activity will be focused on coordination of the entire process to populate such data room with information and on coordination of communication between investors and your firm.

     

  4. Financial Model

    Key document is the financial model of your business development. It is the future cash flow that an investor buys. Reliability of your prognosis must be supported by results of previous years, and audit review. Financial model includes assumptions about macroeconomic developments, costs, inflation, exchange rates, and, of course, your business prospects, its efficiency, market share, etc.
    Together with your company and investment bank we will build a well balanced financial model, which will attract most interest from prospective investors

     

  5. Management Presentation

    Other important document is a management presentation, in which we should tell potential investors all about the company’s past, present and future. Furthermore, the presentation is a summary of our financial model, audit and legal review and your company’s view of the future. When we meet potential investors during the road show, we will have an hour/hour and a half in order to convince them that it is your company they should be investing money in. Therefore, the management presentation has to be an effective tool of convincing. Jointly with your company and investment bank we will create such a presentation. Our aim is to show strongest sides of you business

     

  6. Road show

    Meetings with potential investors are organised by the investment bank is the road show event which last a number of working days, depending on geography of the equity transaction, size thereof and the type (private equity deal or IPO, for instance). It may imply meetings in London, Moscow, Frankfurt, New York, Hong Kong and Singapore. We accompany your team and participate in all meeting, relay your ideas to investors and increase their interest for the deal.
     

  7. Final negotiations, shareholders agreement

    After the road show, we determine the short list of potential investors that showed most interest in the equity deal. We negotiate final terms and conditions, i.e. price, structure which include many nuances. All negotiations are done together with the investment bank, as well as work on the relevant documentation

     

  8. Closing the deal

    Once we accomplish all stages, which may take from 4 to 8 months usually, we close the deal.

 

 

Corporate structure and corporate governance

 

Working in close collaboration with you we can provide advice that will enhance perception of your organisation to creditors or investors. We will see if your company’s organisation structure, as well as operational management and corporate governance ought to be improved. Furthermore, we will advise you on a possibility to improve assets/liabilities structure, how to increase efficiency of liquidity management, operational efficiency, risk management system.  We will look at your company as if we were your creditors and will tell you about shortcomings, which bankers would notice, and will help you to fix them.

 

As a result, you will have a better control over your business, which, in turn, will become more efficient. At the same time, more positive perception of your company, will enable your company to pay lower interest rate, which will decrease the overall cost of funding.

 

 

International business structure

 

You business successfully grows and you look to expand your activities beyond domestic market. Your firm plans to get access to international finance market and raise funds through international syndicated loan, issuance of Credit Link Notes or Eurobonds. You would like you company’s structure to be more attractive for international investors.

 

Thus, you intend to create an international structure for your business.

 

We can advise you on such structure and coordinate the process of cooperation with renowned international tax counsels and service providers to set up and, if necessary, run the international structure.

 

 

Asset management – portfolio investments in capital markets

 

Your main asset is your company. It is the major source of your present and potential wealth. Our investment philosophy adheres to the risk diversification and solid fundamental research. Therefore, if your major source of wealth is in Russia, at least some assets you ought to invest outside of Russia to achieve country risk diversification. We will design an investment portfolio that will correspond to your risk-return strategy.

 

This particular type of service we provide to owners and top management of our corporate clients.