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Asia Financial Buyer (Feb 2007)
The sixth issue of our publication for our private equity, venture capital and other financial investor clients. The Feb 2007 issue features articles on India updates; impact of IFRS on private equity deals; the boom in Australian M&A; the tax climate for foreign investments in Korea; and outmanoeuvering the corporates. Click here for more details.
Impact of HKFRS on investment structuring (Dec 2006)
Accounting for investments in a fund's financial statements has historically been relatively straightforward - almost always at fair value. However, the implementation of "IFRS equivalent" standards, and hence the adoption of IAS 32 and 39 into several of the region's accounting frameworks (such as those in Hong Kong, Singapore and Australia) has brought to the surface other accounting issues with very different and problematic operational implications for the industry. The accounting for certain convertible bonds is one of the issues which is not restricted to the funds industry, but is prevalent in many sectors including in entities operating in China that are seeking private equity finance in the run-up to an IPO. Private equity funds frequently attempt to structure financing transactions through the use of convertible instruments. During the recent financial reporting season, the implementation of IAS 32 and 39 has brought some unpleasant surprises for companies that had not fully anticipated their implications regarding the accounting for convertible instruments. Click here for more details.
Exit Strategies - Plan Early to Maximise Returns
In looking to exit an investment, a critical review of the portfolio company needs to be performed. Standing in the shoes of potential purchasers, an analysis should be performed on inter alia, quality of historical earnings, cashflow vulnerabilities and sensitivity of projections.
With a focus on packaging the company to make it more attractive in the eyes of potential buyers, one needs to anticipate representations and warranties that the future buyer may request, likely areas of purchase price adjustments and consideration of a purchasers' preferred acquisition structure. |
