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FINANCING

We at Equilor are well aware that establishing an optimal financing structure is indispensable for the balanced and effective operation of a company. Accordingly, we regard finding financing solutions that are best suited to the individual needs of our customers to be our paramount task.

In addition to general bank loans, we also support our customers in getting subsidised bank loans, and have thorough knowledge of the Funding for Growth Scheme (NHP) and the Export Promoting Credit Program (EHP) as well as other products of EXIM Bank.

 

EQUITY TYPE FINANCING

Venture 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 (e.g. Jeremie funds).

Share issues

Issuing shares is a typical form of fundraising for companies in their growth and mature phase; the form of the issue may be private or public. Issuing shares through private placement is a simpler and quicker process, however, probably one of its greatest disadvantages is that it does not allow the company to offer and sell its shares to a wide range of investors.

An alternative to private placement may be the admission of the shares of the company to trading on the stock exchange, and then the public offering of these shares to retail and institutional investors. Although public offering is a complex and longer process, the listing of shares on a stock exchange may have numerous advantages:

  • Through public offering, more investors can be reached, and the concentration of investors is lower.
  • Public offering has 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 get bank financing may improve.

Our staff has access to a wide range of domestic and international investors, enabling us to participate in several successful public offerings in recent years.

 

DEBT FINANCING

Bank loan

Bank loans are typically one of the cheapest sources of financing, thus by means of debt the financing costs of companies may be kept at an optimal level. The conditions at which loans may be obtained vary from company to company, and the terms they are able to achieve are to a large extent determined by the quality of the business plan prepared for the borrowing and the negotiation strategy of the company.

In addition to having a wide overview of banking products, our Corporate Finance team has also acquired significant experience in recent years in the negotiation of credit terms with banks. This enables us to provide useful assistance to our customers in the selection of the optimal loan and the negotiation of the terms.

In addition to general bank loans, we also support our customers in getting subsidised bank loans, and have thorough knowledge of the Funding for Growth Scheme (NHP) and the Export Promoting Credit Program (EHP) as well as other credit products of EXIM Bank.

Bond issues

It is frequently the case that a 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. A transparent and cost-effective alternative to this may be a private bond issue, which can be implemented quickly, and whose terms (e.g. interest rate, duration) can be adjusted flexibly to the needs of the company and the investors. Privately issued bonds can be transferred to third parties freely, making debt management simpler as compared to individual loan agreements.

The public issue of bonds typically offers an attainable alternative to bank financing for larger companies aiming to diversify their capital structures. As a result of the diversified investor base, bondholders have significantly lower control on operations as compared to banks, while the terms of the bonds(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 determining the appropriate bond type (private or public issue), considering the financial standing, strategy and operational peculiarities of the given company. Upon our clients? request, we determine the amount of 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, as well as prepare the financial calculations and documentation necessary for the implementation of the transaction. In addition to our sales network?that 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 lead manager in the successful implementation of several public offerings of corporate bonds. Through this performance Equilor has become the most active transaction advisor in recent times in the Hungarian corporate sector.

 

SPECIAL FINANCING SOLUTIONS

Certain corporate situations require special, individual financing solutions in order to ensure that the objectives of the company will be achieved at optimal terms and financing costs. Such solutions may include the issue of convertible securities, or the disbursement of subordinated loan.

Due to the expertise and experience of our staff, we will elaborate customized solutions for all our customers so that fundraising may be implemented at terms as favourable as possible under the given market circumstances.

Equilor Asset Management Ltd.

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