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Emergent Countries – Going Public as a Financing Option
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EMERGENT COUNTRIES – GOING PUBLIC AS A FINANCING OPTION
– ROMANIA STUDY CASE –
Going public as a financing option
For worldwide&europe – going public IS a sound capital budgeting choice
Romania
Lowest stock market in terms of capitalization
Liquidity problems
Romania Economic Outlook
Pressure on operating margins
Buyouts
Increasing payroll expenses
What do companies do?
Apply for credit – worsening access lately
Private equity
– investment funds
IPO – 2 or 3 IPOs per year, directly related to Bucharest Stock Exchange low
capitalisation
Small and Medium Enterprises:
there is a need for investments
accounting and fiscal challenges
working capital dysfunctions
Biggest financing needs: real estate, construction & engineering, industry (textile, manufacturing)
Negative factors:
low financial education of SME management and shareholder regarding:
auditor’s role and added value
alternative financing options (cash or credit)
reluctance to having a representative nominated by the Authorised Adviser to the Supervisory Board of the Issuer.
strong competition regarding IPO financial services – Alpha Finance, Raiffeisen Capital & Investment (usually all banks have a finance division)
the EU funds, which are becoming more and more accessible to all the companies
a strong market for private equity deals (investment funds – Advent, Enterprise Investors, Trigon Capital)
current