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Building An IPO Project Management Team
- 1. Building an IPOproject management team: DRIVING COMPANIES TOWARDS SUCCESSFUL IPOS Kelvin Ho Chief Financial Officer, Changjiang Fertilizer Holdings Limited 9 September 2015
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- 3. 3 Content 1. Benefits &Burdens 2. Essentials Before Setting Off 3. Forming Your Team 4. Pre-IPO Tasks Due Diligence Prospectus Liability 5. Life After Listing 6. Achieving Listing Success 7. Conclusion
- 4. 4 Content 1. Benefits &Burdens
- 5. 5 Benefits and Burdens +Cash& greater funds access +Liquidity for investors +Recruitment and retention of talent +Enhanced stature & perceived stability +New “currency” for M&A • Assets Acquisition • Collateral Security - Risk of losing management control - High initial listing costs & ongoing expenses - Draining company time & resources - Reduced flexibility in corporate affairs - Share price subject to market volatility
- 6. 6 Content 2. Essentials BeforeSetting Off
- 7. 7 Do you havethe “right” stuff? “The IPO did well because the company is operating in the right industry which is related to pharmaceutical, medical and healthcare. There is very strong demand for stocks operating in the medical and healthcare sector here.” - Remisier, Alvin Yong
- 8. 8 Do you meetthe listing criteria? Operating Record Profit Market Capitalisation* *Computed based on invitation price and post-invitation share capital Option 1 Option 2 Option 3 >= 3 years >= 3 years Operating Rev (actual or proforma in the latest completed FY) Min consolidated pre-tax profit of at least S$30million (latest FY) NIL NIL NIL >= $150Mn >= $300Mn
- 9. 9 Essentials before settingoff That’s not the end!!!
- 10. 10 Essentials before settingoff Is IPO really for you? Can management participate in the listing process without putting the business operations at risk? Does achieving additional milestones help the company’s listing? Now or later?
- 11. 11 3. Forming yourteam Content
- 12. 12 The Management Team ROLE Makingroad show presentations
- 13. 13 The Board ofDirectors Be involved throughout IPO process IDs typically not involved in due diligence and drafting sessions Reviewing and authorizing the filing of prospectus
- 14. 14 Investment Bank Overall incharge Role of Issue Manager and Underwriter Anticipating potential or likely issues Formulating strategies SGX’s queries Book-building Advising IPO structural issues Arranging road shows Marketing offering
- 15. 15 The Company’s LegalCounsel Assisting with pre-IPO corporate housekeeping and IPO preparations Drafting and ensuring the prospectus's compliance Responding to MAS’ queries Provide critical advice to the Company
- 16. 16 The Underwriter’s LegalCounsel Assisting under- writers Participating in the drafting process Drafting the underwriting agreement
- 17. 17 The Company’s Auditors Auditedfinancial statements & Advisory for finance related matters Company’s ongoing financial reporting obligations
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- 19. 19 4. The Pre-IPOTasks Content
- 20. 20 Are you readyfor the due diligence? Role: Are your financials in shape? How well do you comply with rules and regulations? Does the intellectual property belongs to the Company? How’s the key contractual relationships?
- 21. 21 Prospectus Liabilities Thereis false or misleading statement in its prospectus Failure to disclose material information Failure to state a new circumstance Under the Securities and Futures Act (SFA), an entity is guilty of making a false or misleading statement if:
- 22. 22 Content 5. Life afterListing
- 23. 23 Post IPO OrganisationChart Audit Committee Board of Directors Remuneration Committee Nomination Committee Share Trading Policy Continuing disclosure policy Corporate Communication policy Risk Management Policy
- 24. 24 Continuing Listing Obligations SGXListing Manual Transactions with interested person Continuing obligations Continuing obligations Financial Reporting Corporate Governance • Major acquisitions and disposals • Change of principle activities • Shareholder approval requirements • Best practice recommendations • Majority of these guidelines are not mandatory • SGX applies an ‘if not, why not’ approach • Shareholder approval requirements • Publish prescribed financial reports • Quarterly, half-yearly basis • Immediate announcement • Information reasonably with material effect on the price or value of its securities
- 25. 25 Achieving Listing The roadto success is always under construction. - “Lily Tomlin”
- 26. 26 Achieving Listing Success IsIPO really for you? Begin the preparations Work on your business plan and financial model Operate as a listed company Be realistic Incentive plans Assemble the right team and keep them motivated
- 27. 27 Conclusion “There is nothingquite so useless, as doing with great efficiency, something that should not be done at all.” - Peter F. Drucker
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