Stand By Equity

Stand By Equity

Stand By Equity is a flexible and cost-effective alternative to a traditional equity private placement or secondary offering. It provides the Company with the right, but not the obligation, to issue shares and raise capital at a time of your choosing.

Under the Facility, your Company will receive a firm commitment by the Stand By Equity provider to purchase new Company shares up to an agreed maximum value. The facility would normally be available for up to 3 years and renewable thereafter. The program is entirely controlled by the Company.

In contrast to a traditional public offering, private placement or rights issue, the Stand By Equity Facility provides the Company with the flexibility of raising capital in amounts and at times of its choosing

Features of a Stand By Equity Facility

Flexibility

  • Size of facility agreed to match the Company's individual financial needs
  • Stand By Equity Facility can be drawn down upon at any time
  • Company can set a minimum acceptable price

Control

  • Company retains control over the amount and the timing of each draw down
  • Company can ask Investor to buy shares regardless of market conditions
  • Investor is a passive shareholder with no requirement for board representation

Speed

  • No negotiation of placement or underwriting documents required
  • Company can take instant advantage of a favourable stock price
  • Process is fast, settlement occurs within days

Certainty

  • Obligation to buy shares is binding upon the Investor
  • Shares are issued as the Company determines, no uncertainty regarding outcome or dilution
  • Investor remains committed for the full 3 year period of the Stand By Facility
  • Company is not committed to sell any shares, can do so only if it decides to

Cost-effective

  • Cost is fully competitive with traditional financing structures
  • Moderate establishment and maintenance fee
  • No non-usage fees

No security

  • Unlike a credit or borrowing facility, there is no security requirement under this facility

No Short Selling or Hedging by Investor

  • Investor covenants not to cause or engage in any direct or indirect short selling or hedging of the securities of the Company

Public/ASX announcement

  • The company�s profile is likely to be enhanced by the required ASX announcement following the facility being put in place. Companies often advise shareholders and the media directly as well.

Uses of Stand By Equity

  • Working capital/build cash reserves
  • Funding acquisitions
  • Funding capital investment and expansion
  • Retire debt/reduce balance sheet gearing/reduce borrowing costs
  • Enhances Company�s credit and borrowing status

Integral Capital is experienced in arranging Stand By Equity facilities Contact us now for a confidential discussion today, simply fill in the below form and one of our highly experienced Stand By Equity experts will be in contact within two business days.

 


Need Stand By Equity? Fill in this form and we'll contact you to discuss your business opportunity within 2 business days.

 

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