Corporate Investment > Capital Markets > Equity Financing > Public Equity

Equity Financing

2. Public Equity

PhillipCapital has extensive knowledge of and experience in the capital markets, as well as contacts with institutional investors which enable us to advise how best to meet your financial requirements. We provide an extensive range of capital raising services such as IPO initiatives and other financial advisory services.

Initial Public Offerings (IPOs)

Going public represents a significant milestone for any company. Most companies will reach a stage in their development when their growth may be constrained by the need for additional capital. Typically, companies resort to taking loans, among other financing options, to meet their capital needs as they are relatively simple to arrange and will not dilute shareholders' ownership. However, high reliance on debt rather than equity can be a high-risk strategy for growth or may even threaten the ability of any company to continue as a going concern. Hence, the decision to go public, or not, should be based on hard business realities.

WHY LIST?

To the Company

• Provides additional capital resources via placement and opens up future fund raising exercises through Rights issues and Debt issues;
• Option of listing new shares as consideration for acquisitions;
• Enhanced corporate image which will lead to higher chances of attracting talented employees;
• Improved financial position due to more favourable debt-to-equity ratio following listing;
• Improved credibility with suppliers and customers.

To existing Shareholders

• Increased liquidity and marketability of shares - shareholders may sell their shares to the public if they wish to do so or use it as collateral;
• Release from personal guarantees given by existing shareholders to secure bank loans prior to listing;
• Lesser burden on major shareholders to raise funds for further expansion as burden will be shared by public investors.

To the Employees

• Better morale resulting from prestige obtained via working in a listed company;
• Better reward packages including employees' share option schemes that allow employees to share the profits of the company.

GENERAL REQUIREMENT FOR LISTING

A company may apply for admission to the Official List of the SGX Mainboard or SGX Catalist (formerly known as SGX-SESDAQ) and will have to satisfy requirements, including the following:-

• Company must be a going concern or be the successor of a going concern and its accounts audited;
• Healthy financial position with no shortfall in working operating capital;
• All debts by directors, substantial shareholders and companies controlled by directors and substantial shareholders must be fully repaid;
• Strong management team and continuity of management throughout the relevant period. Directors and management should have appropriate experience and expertise to manage the company. Good character and integrity of the directors, management and controlling shareholders are essential;
• At least two non-executive independent directors on the board. Independent directors should make up at least one-third of the board;
• Full disclosure of vulnerability to specific risk factors;
• Full disclosure of any conflicts of interest and related party transactions between the company, its directors, substantial shareholders and related companies. Potential conflicts of interest should be adequately resolved prior to listing.

FINANCIAL REQUIREMENTS FOR LISTING

(i) On SGX Main Board

A Company should meet one of the following criteria for Main board listing:

For alternative 1 and 2, the company must have been engaged in substantially the same business and have been under substantially the same management throughout the period for which the relevant profit test applies.

(ii) On SGX-Catalist

SGX-Catalist is a sponsor-supervised listing platform where companies that wish for admission must do so through a full sponsor, of which Phillip Securities is a pioneer sponsor. Although SGX still retains its discretion to impose post-listing conditions, delay or refuse an application, the onus for qualifying the companies falls upon the sponsor rather than with SGX under the old SESDAQ regime.

Under SGX-Catalist, the company must have a sponsor at all times and seek advice from its sponsor regarding Rules compliance post-listing.

More information on SGX Catalist can be found at http://www.sgxcatalist.com

OUR SERVICES IN RELATION TO IPOs

For clients seeking a public listing, Phillip Securities will:

• conduct a feasibility study and advise on pre-flotation capital restructuring;
• prepare all submission materials (draft Prospectus) for submission to the relevant authorities and attend to their subsequent queries;
• plan and coordinate the activities of all parties involved, including auditors, valuators, solicitors, registrars, public relations consultants, etc.;
• advise on the launch timing, appropriate issue structure and issue price;
• underwrite the company's shares which will be offered to the public;
• active marketing of the issue through our extensive global network of stockbroking operations (in the event of a private placement or a foreign tranche) covering Australia, Hong Kong, Indonesia, Japan, Malaysia, Singapore, Sri Lanka, Thailand and the United Kingdom;
• invite public subscription for the company's shares, conduct the balloting and allotment of shares and prepare the public announcement; and
• for companies that cannot meet the listing criteria, Phillip Securities will advise on how they should prepare for listing at a later date.
• act as a continuing sponsor for SGX Catalist listed companies

TRANSITION FROM SGX_SESDAQ TO SGX CATALIST

For clients seeking to transit from SGX-SESDAQ to SGX-Catalist, they will have 2 years grace period from the launch of Catalist for the transition. The company must seek and obtain a sponsor whom is willing to take on the ongoing role of sponsorship for the company on the SGX-Catalist board.