Financial Engineering and the creation of Holding Companies:-

We Investment Holdings BVI is proud to have assisted a number of local, Arab and Gulf based companies in the financial engineering of their established and ongoing entities and creating one or more holding company for each Group to be able to professionally expand.

The important reasons to create a Holding Company could be explained as follows:-

• The acquisition of the Holding Company of a number of affiliated companies would require a major due diligence and valuation exercise. The valuation on today’s prices normally results in a much higher net worth / Capital for the owners of the Group. As such the increase in the capital of the owner(s) is the first important reason to create a Holding Company.
• Once the Holding Company is created and its value established and approved by the authorities, it offers an appropriate vehicle for existing shareholders to invite new shareholders to join them and enlarge the capital of the HC. As such the second important reason is to add more capital to the Group based on the new valuation that recognizes the value of the previous accomplishments of present owners. This exercise is normally done through a Private Placement to Institutional Investors
• Once the Holding Company is created it could be listed on the stock market thus offering liquidity and daily share price for the Holding Company. This means also that the HC is going for a diversified and large shareholders base and the existence of retail investors will dilute the dominance of major investors. So the third important reason is liquidity and trading on the stock market with its daily price quotations.
• The due diligence and valuation exercise needed for the creation of the Holding Company offers any group a golden opportunity to reorganize its companies and documents legally, financially and by organization structure. So the fourth most important reason is reorganizing the present companies and the Holding Company for the future of the Group based on scientific grounds.
• The Holding Company offers the Group the opportunity to consolidate its cash flow on the HC level thus giving the company more cash on hand for negotiation with banks, suppliers etc.
• The Holding Company offers the single owner the important advantage of passing to his children not a company but shares in the stock market that has daily value. The children can exit the Holding Company and cash their investments; alternatively they may wish to pursue their own dreams rather than continue their father dream and as such recruit professional management that would report to the board and General Assembly. So the sixth important reason is solving inheritance potential problems during the father’s life.
• The creation of the Holding Company is a time consuming process that would take around 9 months. This is because it includes the due diligence exercise, the valuation of the companies, the legal and tax review of the existing entities. In addition to this, the need to obtain the approval from the authorities on the value and the capital raising requirements.

1. Corporate Finance Advice to the Private Sector

we offers a broad range of corporate finance advisory services to large private sector companies, local and international institutional investors. The range of corporate finance, services offered is as follows:

• Corporate Recovery and Financing Options Turnaround

Commercial and strategic reviews

Viability assessments

Cash flow reviews

Balance sheet reconstruction

Advice to lenders and corporations

Development of turnaround plans

Re-financing and fund raising

Disposals advice

Debt reduction programs

Bank security assessments

Evaluation of debt structures

• Mergers and Acquisitions

Sector research

Acquisition targeting

Valuation and pricing

Acquisition strategy

Financial modeling

Tax structuring and advice

Fund raising

Negotiation support

Due diligence reporting

Post-acquisition planning and implementation

• Leveraged and Management Buy-Outs

Assisting in negotiations and pricing

Advising on structure

Advising managers on preparation of business plans

Arranging introduction to sources of finance

Financial projections

Financial modeling

Market studies

Tax structuring

Post-acquisition planning

Due diligence

• Corporate Disposals

Disposals strategy

Valuation and pricing

Sale memoranda

Targeting acquirers

Marketing

Managing the sales process

Negotiation support

Taxation advice

Bid evaluation

• Bid Support

Practical advice prior to announcement of bid

Business analysis

Financial analysis

Competitive positioning

Strategic logic

Presentation support

Verification

• Structured and Project Finance

Project structuring and financing

Corporate funding

Complex financial instrument evaluation

Interest and foreign exchange risk management

• Business and Investment Valuations

Acquisitions and disposals

Joint ventures and strategic alliances

Real Estate Development Engineering Company

We have  been mandated by a local Group of Companies to be their Investment Banking Advisor and assist them in the sale of three hotels to anchor investors. The scope of work included  determining the selling price based on the Discounted Cash Flow and the Market Value of Assets Methods as well as marketing the resorts to potential investors. The study entailed as a first stage conducting a tourism market study that covered Egypt in general, Gulf of Aqaba and Sharm El Sheikh  in particular to determine the expected market share of the resort and project future revenue. The assignment included the preparation of an information memorandum to be used as a marketing tool to potential investors. It also included the search for potential investors and negotiations.

Kuwait Holding Company

We have been  mandated by a private local group to valuate all their companies that are engaged in different activities with the purpose of incorporating a holding company. In the process of floating twenty percent of the Holding Company after its incorporation on the Cairo Stock Exchange. A large team of legal, financial, marketing and investment bankers is engaged in this large exercise that is vital to the client and to our company. The assignment is critical as it sets new trends in the Egyptian Local market characterized by Private Sector companies being quoted on the stock market which means more visibility for them and more transparency of their financial wealth. Preparing all the stock market primary offering documentation including a detailed prospectus, establishing brokerage relations, supervising execution and the clearing of stocks..

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