Private Placements

Raising Equity Capital

Private Рlacement — the sale of stock (up to 40%) to a relatively small group of investors (up to 10) by either selling shares in circulation, or newly-issued shares. The investors involved include private equity and pension funds, large international banks, and insurance companies.

Client benefits

—

Attracting external funding with no specified repayment period.

—

Independent business valuation that can further be used in negotiations over majority share holding sale to strategic investors.

—

Access to the resources of international capital markets.

—

Attracting professional investors’ intellectual resources to managing prospective issuer’s business.

—

Increasing a prospective issuer’s investment attractiveness by including professional investors in the shareholding structure.

Sokrat services

—

Preparing formalized development strategy and financial model.

—

Business valuation and estimation of optimal shares percentage to be offered.

—

Business restructuring legal advice and assistance — to comply with investors’ requirements.

—

Communication with investors to ensure competitive share pricing.

—

Transaction support and tax planning.

—

Preparing information materials and documentation for investors.

Transaction features

—

Desirable, but not mandatory IFRS and independent Board Members.

—

Absence of formal requirements and application of less strict requirements to a prospective issuer’s legal structure and information disclosure.

—

No listing required of a prospective issuer’s securities on the stock exchange, IFRS, and information disclosure during and after the securities offering.

Prospective Issuer

—

No requirements to comply with stock exchanges’ information disclosure standards.

—

Business development strategy for the next 3-5 years desirable, but not required.

—

Not necessarily an industry leader, though it has positive growth dynamics.