Enhancing corporate shareholder value

At present, the owners and managers of many Russian businesses are considering the advisability of going public with their companies. As a rule, in order to achieve this objective a number of issues need to be addressed, namely:

• Funds need to be raised in the finance and credit markets
• Company's value need to be brought in line with its inherent unlock value

The professionals at Horizon have accumulated considerable experience providing consulting services to companies pursuing this objective. The solutions devised by the experts at Horizon for their client are aimed at enhancing the company's shareholder value and expanding opportunities along the entire range of the company's operations.

Stages in going public

The first stage is in fact taking the decision for the company to go public and beginning the preparation for this move.

At this stage, the company pursues the following principal objectives:

• Promoting the company among potential investors as an attractive investment story
• Enhancing the effectiveness of the company's operations
• Increasing the company's market share

Investors are particularly interested to know whether the company's management has a clear strategy for the development of its business and a policy to position the company in the market. In this context, issues of optimizing the company's corporate structure and streamlining its financial reporting procedures acquire special significance. At this stage, the legal and financial reporting documentation of the company aiming at accessing the public market must be brought in conformity with the requirements and rules regulating the issuance of securities.

The second stage marks the issuance of Russian debt financing instruments.

The main objective pursued at this stage is to develop the company's public credit history and to make it known to investors who are not experts in its area of operation. It is advisable to issue debt securities prior to taking steps to access the IPO market. Furthermore, placement of promissory notes should precede the issuance of corporate bonds.

The next stage following the successful placement of debt instruments is a public placement of the company's shares in the Russian stock market. The concluding stage of the process of going public is the placement of shares in the international financial market.

Placement of securities is just the beginning of the company's presence in the public market. Developing and maintaining relations with investors is a new challenge for the company that requires constant attention and that can be also addressed successfully with the assistance from Horizon.