We at Equilor are well aware that an optimal liability structure is indispensable for the balanced and effective operation of a company. Accordingly, we regard finding the financing solutions that are best suited to the individual needs of our customers to be our paramount task.
Equity based financing
VENTURE AND PRIVATE CAPITAL
Raising venture capital is a form of financing that is typically available to start-up enterprises with large potential; the capital may come directly from private investors, or from venture capital funds created for this specific purpose. We are in contact with numerous domestic and foreign investors so that we can offer financing partners suitable for our clients needs.
Issuing shares of stock is a typical form of fundraising for companies in the growth and mature phase; the form of the issue may be private or public.
Issuing shares to private investors is both simpler and quicker, its greatest disadvantage probably being that it does not enable the company to offer and sell its shares to a wide range of investors.
An alternative to the private issue of shares may be the admission of the shares of the company to trading on the stock exchange, then the public offering of the shares to small and institutional investors. Although public offering is a more complex and longer process, listing shares on the exchange may have numerous advantages:
- Through public offerings, more investors can be reached, and the concentration of investors is lower.
- Public offerings have significant marketing and PR value.
- The holdings of the shareholders become liquid, and subsequently easier to sell.
- Business confidence in the company may become stronger, and its chances to receive bank financing may improve.
Our staff has access to a wide range of domestic and international investors, which has enabled us to participate in the successful public offering of several companies in recent years.
It is frequently the case that the company’s shareholders themselves or other stakeholders (e.g. suppliers, major buyers, other partners) also participate in the financing of the company by providing shareholder or other loans. Private bond issues may be a transparent and cost-effective alternative to this, as they can be implemented quickly and their terms (e.g. interest rate, duration) can be adjusted flexibly to the needs of the investors. Privately issued bonds can be transferred to third parties freely, which makes it possible to manage the debt more simply as compared with individual loan agreements.
The public issue of bonds typically offers an attainable alternative to bank financing for bigger companies that wish to diversify their capital structures. As a result of the existence of diversified investors, bondholders have significantly lower control on operation as compared with banks, while the terms of the bond issue (duration, collateral, size and timing of issue) may be designed flexibly, adjusted to the individual characteristics of companies.
The advisors of Equilor Corporate Finance provide assistance in the selection of the bond type (private or public issue), considering the financial standing, strategy and operational peculiarities of the given company. Upon our customers’ request, we determine the amount of the funds necessary to achieve the company’s objectives, and estimate the maximum amount of funds that may be raised in the market. We identify potential investors and prepare the financial calculations and documentation necessary for the implementation of the transaction. In addition to our sales network—which has wide experience in the capital market—we support the successful implementation of the fundraising process from its outset until the closure of settlements.
In recent years, Equilor’s Corporate Finance team has participated as the leading organizer in the successful implementation of several public offerings of corporate bonds. This performance has led Equilor to become the most active transaction advisor in recent times in the Hungarian corporate sector.
Special Financing Solutions
Certain corporate situations make it necessary to elaborate special, individual financing solutions in order to ensure that the objectives of the company will be achieved at optimal terms and liability costs. Such solutions can include the issue of convertible securities or the disbursement of subordinated loan capital.
Due to the expertise and experience of our staff, we will elaborate customized solutions for all our customers so that fundraising will be implemented at terms as favourable as possible in the given market circumstances.