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Advent uk roadmap 2009

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SOURCING FINANCE …

SOURCING FINANCE

Advent UK Limited, www.advent-uk.com

Published in: Business, Economy & Finance
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  • 1. Guidelines for mutual success Summary 1. Advent UK finance activities and team 2. Roadmap 3. Understanding Western Finance 4. Project preparation: most important points 5. What is expected from project team 6. Conclusion www.advent-uk.com
  • 2. Advent UK activities Funding Financial Network The Projects International Banks Financial Institutions Investment Funds Private Equity Capital Venture Capitalists International lawyers International Accountancy Audit firms Tax specialist
  • 3. Advent UK team Patricia Goodenough President Ian Leapingwell Rupert Potier Joel Barlier Pierre Fourès Michel Lubac Property Business Business Director Project Marketing Projects Development Development Finance Director France Consultant Director Director
  • 4. Road Map purposes •To be fully prepared to meet exacting Western finance requirements •Understanding financial culture •Preparation of project owner profile •Project advantages/opportunities •Building project presentation excellence •Flexibility of financial alternatives •Building relationships with financial partners •Understanding of negotiation process
  • 5. Road Map stages 1- Familiarity with Western Finance expectations and standard procedures 2- Project owner profile and building of a project description according to Western standards 3- Financial strategy and financial syndication for the project 4- Team Setting up (Managing Team) 5- Investor search tactics & negotiations
  • 6. Understanding Western Finance Prime banks These banks are potential lenders for corporate lending (debt finance) and/or project finance with the period of the loan and the interest rates to be decided according to different factors. Sometimes the banks will syndicate large loans with other investors, and they expect the project owners to have invested over 25% into the project. They will look for guarantees against finance which could be guarantees by the City Administration, by another prime bank, mortgage on the land for the project, mortgage on property owned by the borrower, options on shares in the corporate structure of the borrower, and sometimes other guarantee requirements. Today there is very limited access to debt finance
  • 7. Investment funds These funds have institutional investors who have invested according to the Manifesto of the Investment Fund; their money is raised on the Primary or Second Financial markets (AIM or Stock Exchange). The manifesto declares what the Fund will invest into what is the expected return, for example to invest in shares in existing companies and in projects well defined and properly managed producing 20% per annum. Same applications as banks, they will take shares and expect to take profit from the share value increase, the revenues, and the capital appreciation of the project.
  • 8. Private Equity & Venture Capital Funds These funds invest in companies by taking equity (shares), or in projects held by companies. They expect to take a profit with an agreed clear exit policy (selling to an end client) within 3-5 years, selling to an identified purchaser or to go AIM/IPO on the London Stock Exchange. Note on construction finance (also comes under project finance) There are different investors interested in the property and construction market in most countries showing an annual let of over 10%; most are looking at either purchasing an existing Class A building fully let on long leases to prime tenants, or funding a Class A construction project to purchase at term when fully let.
  • 9. Industry partners & Joint Venture European industry principals European construction companies European and British end users such as supermarket groups, hotel groups etc. These companies are looking for joint venture opportunities, or to buy specified commercial centers or hotels, and sometimes to manage hotels only.
  • 10. Preparation of your investment requirements We check your company profile and its project with the investment requirement. We will establish together if the requirement is: Debt Finance or Project Finance (banks) currently difficult Investment Funds Private Equity Venture Capital Joint Venture with a suitable partner You will need: Project owner profile & full project description Financial requirements with drawdown requirements Payback cash flow projections Guarantees, security, own funds Equity proposition and relevant exit policy for the investor.
  • 11. Western viewpoints – main points • Analytical expectations rather than only a global vision • Limiting risks on forecast profits more important than maximizing possible earnings • Access to raw materials & how you access markets • Guarantees & security of exit at term • Emphasizing management & control over investment implementation
  • 12. Western viewpoint Management versus Investment approach • Importance attached to initial precise studies of: • planning • budgets • markets and competition, market position • alternative scenarios • Preference for careful forecasting • Implementation of an accurate management of the investment phase • Energetic project driver team, age and experience
  • 13. Western viewpoint Analytic versus Global vision • Presentation, advice & support of Western specialists highly appreciated (Advent UK) • Strong insistence on details • Business model clarity • Legal & fiscal structure of project owner, shareholding, balance sheets, assets all very important
  • 14. Western viewpoint Risk versus Gain • More important to realize what has been announced in the plan than to anticipate to gain fortunes • Importance of decision making process within project team with financial team • To be prepared to invest in studies (feasibility & marketing studies etc.) to assure accurate projections • SWOT analysis
  • 15. Western viewpoint Guarantees by project owner Valuations on assets/security – land, plant, buildings, cash, vehicles, other assets Government guarantees? Valuation on shares of project company Value of sales contracts and terms
  • 16. Western viewpoint Specialized versus General • Funding institutions are now very much specialized by teams covering: • Financial requirements (debt finance, project finance, construction, JV, M & A) • Market sector activity (industry sector – energy, construction, agriculture, plastics etc.) • Geographical areas (Russia/CIS) • Decisions by investors are always collective, and made through a decision making procedure, legal, fiscal, managements etc. • Decisions will be through written files leading to contractual agreements • The project owner has to become a financial expert!
  • 17. Western finance today Finance market • Land &construction • Russian equipment • Country 1 equipment • Country 2 equipment One loan • Utility vehicle fleet • Intangible property • IT • Float • Studies • …
  • 18. Western Finance possibilities 100% perhaps with rental contract • Land Buildings & laying out No credit • Russian equipment % Guaranteed purchaser credit • Country 1 equipment % Guaranteed purchaser credit • Country 2 equipment Leasing? • Utility fleet/machinery % loan • Intangible property % loan • IT Factoring? • Float (stocks, suppliers, ...) No credit • Studies Cash management products • Overheads Gap to be financed by : • Total Funding need Project owner Investors
  • 19. Western Financial Control of ownership MOST IMPORTANT : A global funding Several ways to finance Ways to keep control need that the the funding needs through of the project by the project owner external finance people project owner cannot provide Project Loans/Rents Project cash flow Loan & owner guarantee • Total Funding need Owner cash Owner cash Total or partial buy- Investors Cash back by project owner through his personal future increased ability to find new funding
  • 20. What is expected from project team Dedication to the project Dedication of time and project team competence Lots of work! Mastering finance culture Active project elaboration team Proximity to project owner Ability to react quickly and precisely Mastering of PowerPoint presentation and Excel spreadshest Re-activitve responses and regular synchronization Transcultural willingness
  • 21. Advent UK activities Conclusion The Project Financial Network presentation International Banks Financial Institutions Investment Funds Private Equity Capital Venture Capitalists International lawyers International Accountancy Audit firms Tax specialist Advice, support & search for your financial partners & financial coordination
  • 22. Contacts ADVENT UK LTD Suite 8, 28 Old Brompton Road, LONDON SW7 3SS Tel +44207 801 3080 Fax +44207 691 7969 Bureau d'information France: 15 Rue Clément Bayard, 92300 Levallois, PARIS Tel +331 47 48 91 97 Fax +331 47 48 02 22 Representation office Russia: State Research Institute Test 56B Ligovsky Prospect, 191040 ST PETERSBURG Tel +7812 712 0176 www.advent-uk.com Building Excellence in Business

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