Present:

Overview of an Initial Public Offering

December 2000
GOAL: A SUCCESSFUL IPO

SUCCESS
• To raise additional funds in the future at attractive conditions
• To reward shareholders for their commitment
(majority shareholders+personnel+new investors)

INDICATOR
A succesful • Indicator: oversubscription + good after market
IPO
BENCHMARK
• Benchmark: share price rises on the first trading day and excess
return above market index

PRODUCT Company: attractive? swot-analysis

PRICE Valuation: equitable? different methodologies
Keys for
PLACE Distribution: appropriate? quality investors
Success
PROMOTION Communication: focused? key arguments
TIMING Moment : right? market conditions

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IPO CRITERIA

• Track record
Attractive
• Potential for future growth
background • Supported by strong management capacity

on-going readiness to
communicate

Transparen • Group structure: capital, management

cy • Incoming flows: dividends, other remuneration

sound corporate governance + externalisation

of earnings

Requisite • Free float in relative terms: depending on selected Exchange

size • Free float in absolute terms: depending on selected Exchange

alternatives ? pre-IPO finance, private

placement
Legal
• Competent authority: EU-directive (if European listing)
requiremen • Market authority: depending on selected Exchange
ts
Regulations on-going disclosure requirements

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PRELIMINARY PREPARATIONS
Delineate activities
Optimize group structure
Object of Introduce high-calibre reporting systems
IPO Adjust accounting system
Streamline incoming flows

• Amend articles of association

Tax/Legal • Arrive at amicable settlements
• Introduce a warrant plan for personnel
• Put company-shareholder relationship on objective footing

Organisatio • Propose (further) professionalisation of management

n • Appoint full management team
• Prompt expansion of board by addition of external directors

External
• General public press releases, open-house
communicatio • Target public conferences, fairs, specialised press
n

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FROM DUE DILIGENCE TO LISTING
4 to 8 weeks

DUE DILIGENCE INFORMATION

• Financial management Audited financial statements
• Technical + Markets + Competitive
• Legal specialists position
Business plan
8 to12
weeks

DETERMINE OFFER CONTROL FREE FLOAT

VALUATION MARKET CAP

SET UP SYNDACATE

OUTPUT
DRAFT PROSPECTUS
COMPANY VALUATION

4 weeks

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FROM DUE DILIGENCE TO LISTING

4 weeks APPROVAL PROCEDURE PREPARATION

review Road shows
draft Market final Legal documentation
application Authority Research reports
Printing + translation
approval
4 weeks

MARKETING & PRICING

Road shows + Bookbuilding
Offering price + Underwriting
Inscription period
Allocation + Payment
Listing

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PREPARATION: FIRST STEPS
Financial auditor
• Audit financial statements
• Present financial statements in required format
• Latest figures

Technical Industry expert/market data

Due • Assess industry know-how
Diligence • Determine market, market position, competitors

Process
Legal corporate law firm
• Evaluated all existing legal matters
• Implements/adapt required legal matters
Astragal co-ordinates the due diligece process (timing, detailed
task description, follow-up…)

Business plan company management

Business • Overall and for the major participations
• Interaction with the due diligence process
Plan • Management position + external Board members
Astragal assists in drafting the business plan

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VALUATION

• Business plan
Subject to • Industry expert report/market data
• Timing for the IPO
• Market conditions (interest rates, multiples, appetite for industry)

Methodolog 1) Discounted cash-Flow methods (DCF, EVA)

critical factors - LT-forecast (business plan)
y
- Discount rate (risk evaluation)
- EBIT margins

2) Industry multiples analysis (P/E, PEG)

critical factors - Peer identification
- Situation in peers in lifecycle

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OFFER AND SELLING

• Control consideration: accepted dilution of present shareholders

Offer • Business plan: required capital for future projects
• Free float requirement: - relative: subject to market
requirements
- absolute: subject to market requirements

Target • Dedicated shipping investors 30 - 35%

• Large global sophisticated investors
investors
• Retail public in selected markets: 30 - 35%

Target • Public offer Countries to be selected

markets • Private placement selected markets
Benelux, Switzerland, Germany, France, UK, Scandinavia, U.S.

• Lead-manager : investment banks to be selected

Syndicate • Co-managers: investment banks providing added value
Astragal also selects and proposes co-managers

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MARKETING & PRICING

Starts after approval preliminary prospectus and press notice

• Preliminary prospectus: final version with certain blank parts
Subscriptio (“Red Herring”)
n • Press notice: contains basic elements of the offer

Period
Duration at least 3 banking days upon avaiability of the
prospectus

Bookbuildin Establish a suggested price range by the start of the

g subscription period
Gauge market demand for the issue through road
Period shows
- institutional: “non-binding” indication
- retail public: fixed orders
Adjust and determine size/price/allocation of the offer
- green shoe

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TASKS OF THE LEAD MANAGER

Co-ordinate due diligence process, determine offer

Compose IPO-team/bank syndicate negotiate

with the competent authorities

Company valuation and propose price range,

prepare prospectus

Co-ordinate and prepare marketing ,

determine
final modalities, underwriting and selling
allocation

Equity research, after market

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IPO COSTS

Banking • Management fee

• Underwriting and selling fee
consortium

Due • Auditors, lawyers, tax specialists

• Technical experts
diligence

Authorities • Competent authority: one-off and annual fee

• Stock Exchange: one-off and annual fee
• Required publications in the press

• Printing of prospectus/shares
Marketing • Cost of road shows
• External PR agency (investor relations)

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