Sorry for the long background, but it's important for the discussion. I'm consulting to a small US based, 15 person technical services company (The Company). It is in the advanced materials space. They have a unique
Unusual Financing: Looking for Ideas and Suggestions
Answers
This is an intl project finance deal and if it makes sense, the co should be able to raise debt and equity capital at the corp level to make the equity investments. Co needs to hire an investment bank to structure and raise the capital. It should be a combination of long term debt and stock.
Thanks Joseph, I think a boutique but recognized I-bank would be the best approach. This is probably too small/niche for a GS or JPM caliber bank... Do you agree? Do you have any suggestions on I-banks?
I have heard of these types of transactions and the driver will be the ability of the founders to raise capital throughout the project, not just initially. So the most critical component above the concept itself is whether the founders have ever raised equity before. This almost sounds like it's in the clean tech industry which is currently taking a beating.
The debt piece won't happen until there is an asset, like a built facility. Debt is not set up to be prospective. Somewhere there has to be liquidity to offer an escape hatch to the lender. I wonder reading this whether when it's all said and done if the founders will end up with anything, which is an important consideration made by potential investors.
Hi Gary,
Thank you for your response. You've echoed my internal thoughts and concerns about the debt and and equity exit/liquidity issues. Given the projects are staggered, it may be conceivable to build a greater equity stake in the later projects based on the CFs/proceeds from the first projects. Thanks once again.