Stock Exchange
Practice

IPO & Equity Capital Markets

Pre-IPO & IPO
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Initial Public Offering (IPO) refers to the process by which a company issues equity publically for the first time and becomes listed on the stock exchange.

There are two methods of offering; Public Issue (offering of new shares) & Offer for Sale (offering of existing shares).

 

An initial public offering (IPO) is a cornerstone event for an organization, and preparation for “being public” is just as important as preparation for “going public.” Gaining maximum value from an IPO requires confidence, decisiveness and the right foundation for success.

Taking your company public is a monumental decision that will truly transform the way you operate. Whether the ultimate exit is through an IPO, SPAC or direct listing, companies need to objectively assess their readiness for life as a public company. Going public requires management to be prepared to meet shareholder and market expectations from day one. This includes addressing ongoing compliance and regulatory requirements, operational effectiveness, risk management, periodic reporting and investor relations.

Many companies who completed their IPOs felt like they started the process too late. Starting early not only provides more time to ready an organization to operate as a public company, but even more importantly, it creates additional time to focus on marketing the offering and other crucial business decisions that will enhance investor confidence in the company’s management team. As such, we at HAEME LEW, always work together with our clients at the Pre-IPO stage ensuring that their companies are ready when the IPO process is taking place.

Private Placements
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Private placement is raised by private limited enterprises and partnerships, as they cannot trade their shares publicly. Typically, start-up and/or small/medium-sized companies raise capital through this route from institutional investors and/or wealthy individuals because:

  • They have limited access to bank capital due to the unwillingness of banks to lend to an enterprise with no proven track record; or

  • they have limited access to public equity on account of not having a large and active shareholder base.

 

Two types of placements:

  • Primary – Sale of new shares by the company.

  • Secondary – Sale of existing shares by a shareholder or the company (treasury shares).

The private placement market allows companies to raise private equity through unquoted shares. It provides a platform where companies can sell their securities to investors directly. In this market, companies do not need to register securities with the Securities Commission (SC), as they are not subject to the same regulatory requirements as listed securities. Typically, the private placement market is illiquid and risky. As a result, investors in this market demand a premium as compensation for their risk-taking and the lack of liquidity in the market.

Derivatives
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HAEME LEW helps clients achieve their business objectives through careful, commercially realistic attention to structuring, documentation, and negotiation.

HAEME LEW lawyers advise our clients with respect to the full range of over-the-counter (OTC) and exchange-traded derivative products. We provide our clients with regulatory advice across key jurisdictions and advise on complex investigations and litigation matters involving derivatives.

 

HAEME LEW lawyers have experience with swap, option, and structured-note transactions involving established products, such as interest rates, currencies, commodities, securities, and credit. In addition, HAEME LEW provides counsel with respect to emerging products and structures, such as those relating to weather, longevity, and property derivatives.

 

HAEME LEW lawyers have extensive experience with the full life cycle of relevant products. From new product development and assessment to transaction execution and documentation, and ongoing legal risk management, including defaults, regulatory-inquiry response, customer complaints, and litigation.

Convertible Securities
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A convertible security is often structured as a bond, note, preferred stock, or a wraparound agreement that results in the conversion of the debt obligation into common stock. The holder of the convertible security or the company may have the ability to determine when the holder of convertible security must convert.

Against a backdrop of stable and low-interest rates and growing equity market volatility, convertible securities are becoming an increasingly attractive financing option that every corporate treasurer should have in his toolkit and every lawyer should understand. Whether advising a company that is looking to raise capital at a premium to today’s market price for its listed shares or to diversify its sources of funding without immediate dilution of existing shareholders' stakes, it is crucial to understand the legal and economic impact of these securities in a company's share capital and financing profile. In challenging equity markets, convertible bonds may offer a compelling financing solution.

HAEME LEW helps our clients, ensuring that they received the best legal advice and representation any lawyer could offer.