sourcing & structuring financing for jv and other business forms
Post on 09-May-2015
511 Views
Preview:
DESCRIPTION
TRANSCRIPT
1
Sourcing & Structuring Financing for JV and other Business Forms
October 2012
IOP INDOCHINA OPPORTUNITY PARTNERS
AMIP OVERVIEW
All Myanmar Investment Partners (AMIP) is a specialised investment and business advisory firm exclusively dedicated to developing business opportuni@es in Myanmar
PRIVATE EQUITY: AMIP – together with Dragon Capital & FIDP – is part of Indochina Opportunity Partners (IOP) IOP has established the Indochina Opportuni5es Fund (IOF)
BUSINESS ADVISORY: Inbound investors: Structuring and overall strategic advisory Local Corporates: Corporate Finance advisory
• The Company has been a long-‐term dream of its founder, Thura Soe-‐Paing, who grew up and was educated abroad, but always envisaged to return to his homeland and contribute with his work experience and capabili@es to create new business and development opportuni@es that would impact posi@vely in the everyday lives of the Myanmar people
INDOCHINA OPPORTUNITY PARTNERS • Indochina Opportuni@es Fund is a $250m
fund – minimum 20% (or $50m) is allocated to Myanmar through AMIP
• IOP leverages the combined infrastructure of Dragon Capital and FIDP in the Indochina region, giving it insider status
• Office network spread over six regional major ci@es (and one loca@on pending), with professional staff
• Dragon Capital provides major back-‐office support in terms of legal, research, accoun@ng, admin from its Ho Chi Minh city headquarters
• It also provides strong sponsor backing via a $10m commitment as co-‐anchor investor of the Fund, alongside Interna@onal Financial Corpora@on (IFC) – part of the World Bank Group
IOP OFFICE NETWORK
HANOI
PHNOM PENH
VIENTIANE
YANGON
BANGKOK
HO CHI MINH CITY IOP Office
Pending IOP Office
SINGAPORE Non-Indochina
INDIA
CHINA
MYANMAR
THAILAND
LAOS
CAMBODIA
VIETNAM
PRIVATE EQUITY POTENTIAL FOR MYANMAR
Reform
Other Drivers
Scarcity of Capital
Vast PotenFal
• Poli@cal reform
• Economic reform
• Liberalisa@on polices central bank independence, financial services
• Starved of growth capital • Produc@vity gains through technology and knowledge transfer with minimum CapEx
• Favourable demographics and geography
• 2013 SEA Games & World Economic Forum
• 2014 ASEAN Presidency
• 2015 ASEAN FTA
• Cash based economy • Very li]le bank/ins@tu@onal financing op@ons
• Most growth is organic
BUT…
CHALLENGES
• Where’s the Law? • The Exit? But first how about the Entrance?
LEGAL & REGULATORY:
• Power • TransportaFon • CommunicaFon • Market Data
INFRASTRUCTURE:
LOCAL COMPANIES:
• ValuaFon • Due Diligence • Big Emphasis on “Trust” and “Seeing Eye-‐to-‐Eye”
STRUCTURING THE VEHICLE
Myanmar Investment Commission Myanmar Companies Act
Holding Company
Myanmar Company 100%
owned JV Company
Investment SPV
Holding Company
Offshore
100% owned
Myanmar Incorporate
JV Company
Foreign Investor
Technology
Investment $$$
Interna@onal Markets
Local Company
Opera@onal Licenses
Exis@ng Overheads and Support
Regulatory Knowledge
Local Market Knowledge
Knowledge
THE MIC & JV ROUTE
i. Friends, Family and Contacts
§ Ini@ally, most likely source of funding for fron@er economies § Characteris@cs:
§ High in volume § Accoun@ng for smaller deals § Most < US$ 5 mil
§ Advantages: § Quick to understand concept / get deal done § Limited legal / structuring considera@ons
§ Limita@ons: § Can be hands on / unsophis@cated investors § Tenure could be shorter § Limited follow on capital
Financing Considera@ons
Trust
Undefined Risks
Loose or No RegulaFons
Evolving business plan
Unchartered Territory
No Track Record
Be\ng on You
FINANCING CONSIDERATION
ii. Family Offices § The next likely source of Funding § Characteris@cs:
§ Largely decided by one investment professional § Accoun@ng for small / mid-‐size deals § Most < US$ 10 mil
§ Advantages: § Rela@vely quick to understand concept/
get deal done § Flexible on legal / structuring considera@ons
§ Limita@ons: § Limited follow on capital § Likely milestones need to be met § Tying-‐in with core business that funds family office
Financing Considera@ons
OpportunisFc
Undefined Risks
Loose RegulaFons
Evolving business plan
Unchartered Territory
No Track Record
Be\ng on Wild Card
FINANCING CONSIDERATION
iii. Corporates
Financing Considera@ons
Strategic
Undefined Risks
Regulated
Evolving business plan
Unchartered Territory
Some/Limited Track Record
Beeng on LT Growth
• Difficult source of funding • Characteris@cs:
• Likely focused on specific business opportunity • Accoun@ng for variety of sizes • Most > US$ 5 mil +
• Advantages: • Brings knowledge / technology transfers • Experienced operators • Ability for follow on investments
• Limita@ons: • Slow to make decisions • Limited ability to react quickly to market
FINANCING CONSIDERATION
iv. Developmental InsFtuFons • Good opportunity for fron@er markets
• Characteris@cs: • Accoun@ng for variety of sizes • Most < US$ 2mil and > US$ 50 mil +
• Advantages: • Mandated to develop fron@er markets • Understanding of country situa@on • Ability for follow on investments • Poli@cal coverage
• Limita@ons: • Slow to make decisions • Can be poli@cally sensi@ve • Tendency to replicate previous models
Financing Considera@ons
Development Driven
Undefined Risks
Regulated
Defined Business Plan
Based Previous
Investments
Limited Record
Beeng on Enhancement
FINANCING CONSIDERATION
v. TradiFonal Financial Players
• Unlikely source of investment ini@ally
• Characteris@cs: • Likely focused on large projects • Prefer liquid investments • Most > US$ 20 mil +
• Advantages: • Quick to invest • Sophis@cated investors
• Limita@ons: • Lack of local market knowledge • Complex structures • Sensi@ve to longer tenures • Conserva@ve investors
Financing Considera@ons
Alterna@ve Investment
Undefined Risks
Regulated
Developed Business Plan
Unchartered Territory
No Track Record
Beeng on Low Risk / High Return
FINANCING CONSIDERATION
Thura Soe Paing Managing Director Email: thura@allmyanmarinvestment.com Tel: (95) 9 731 20887
top related