company, or founders of the
company,” said Marlatt.
Another source said there was
no underwriting involved in 4(a)
(2) deals, which leaves any bank
involved in the placement less
vulnerable to lawsuits if the
debt does not pan out well.
“Investors send their money to a
trustee, who passes that on to the
company. Investors are responsible
for their own due diligence.”
Still, the bond deal will
provide another valuable source
OFûlNANCINGûFORû5BER
It has completed several
rounds of private fund raising –
including a US$1.25bn
investment from technology
investor SoftBank in January,
and a US$3.5bn investment
from Saudi Arabia’s sovereign
wealth fund in June 2016,
ACCORDINGûTOû2ElNITIVûDATA
It also made its debut in the
leveraged loan market in 2016,
and in March this year privately
placed an upsized US$1.5bn term
loan directly with investors.
The loan, like the bond,
helped fund Uber’s cash burn
until its planned 2019 initial
public offering, and also
required investors to get
comfortable with unusual credit
metrics such as negative Ebitda.
Uber said in August that its
net loss narrowed to US$891m
in its second quarter ended June
30 from US$1.1bn a year earlier.
+ULKARNIûAGREESûTHATûANû)0/û
could value Uber at US$120bn,
as reported by the Wall Street
Journal on Tuesday, based on a
nine-times multiple of the
US$11bn of revenue Uber is
EXPECTEDûTOûGENERATEûTHISûYEARû
and Uber’s holdings in three
other non-US based ride-sharing
companies, including in Russia
and China.
“For a company like Uber,
that feels like a fairly
conservative revenue multiple,”
SAIDû+ULKARNI
“When it goes public, people
will likely view this company as
SIGNIlCANTLYûMOREûVALUABLEûTHANû
US$100bn.”
$EPENDINGûONûHOWûITûISû
structured, Uber’s IPO could
be among the largest deals of
its kind, rivalling the US$25bnraised by Alibaba in 2014. (^)
Aramco loan on ice 08 S&P flags ‘Titanic’ LGFV risks 08 HSBC ponders China listing 10
For daily news stories
@ visit http://www.ifre.com
+NUTSONûSAIDûTHEû#REDITû
Roundtable was considering an
open letter requesting
BONDHOLDERSûBEûGIVENûSUFlCIENTû
NOTICEûONûANYûEXTENSIONûTOûTHEû
November 5 deadline.
Investors also must come to
grips with losing any rights
guaranteed under the current
&OXûBONDûINDENTURES ûASûTHEû
EXCHANGEûSPECIlCALLYûSTATESûTHATû
these will be stripped away.
Some investors were
UNIMPRESSEDû+NUTSON ûFORû
EXAMPLE ûSAIDûITûWOULDûALLOWû
$ISNEYûTOûSELLûASSETSûWITHOUTû
having to pay off the bonds.
But Pollock said it was fair:
“The language isn’t out of step
with other investment grade
issuers,” she said.
And one investor said
investment-grade covenants do
not have much bite to begin
with, so the higher-quality
$ISNEYûBONDSûAREûWORTHûTHEû
trade-off.
“At the end of the day it’s a
$ISNEYûOBLIGATION ûANDû)Mû
more than happy to take a
$ISNEYûOBLIGATIONûOVERûANYû
diminished investment-grade
covenants from another
issuer,” the investor said.
4HEûEARLIERûEXCHANGEûWASû
ALSOûBENElCIALûFORûPLANNINGû
capital management, he said.
Indeed, if managed
PROPERLY û$ISNEYûMIGHTûHAVEû
provided a better template –
warts and all – for future deals.
“I give companies credit for
being more timely in talking
about what their plans are on
a going-forward basis from a
capital structure basis and
from a legal entity
perspective,” the investor said.
Citigroup and JP Morgan, lead
dealer managers on the
EXCHANGE ûDECLINEDûTOû
COMMENTû$ISNEYûDIDûNOTû
respond to request for
comment. (^)
EM IPOs try their luck
Equities Recent cancellations hit €4.5bn
BY LUCY RAITANO
Emerging market companies
now dominate live EMEA IPOs as
issuers in developed markets
HAVEûLARGELYûPOSTPONEDûmOTATIONû
PLANSûAMIDûDIFlCULTûMARKETSû
The high proportion of EM deals
is unusual as such transactions
typically have the lowest chance
of success in periods of volatility.
,ASTûWEEKûSAWû+AZAKHû
uranium miner KAZATOMPROMûlLEû
its registration document for a
London listing, South African
phosphate producer KROPZ
launch its AIM IPO and a
renewed attempt to privatise
Slovenian bank NOVA LJUBLJANSKA
BANKA.
The previous week had seen
launches of IPOs from Belarus
for EUROTORG and Romania from
ELECTROGRUP.
Their persistence comes
despite the still fresh memories
of a barrage of IPO cancellations
and the sinking share prices of
Aston Martin Lagonda and
Funding Circle. Last Monday’s
failure of the up to €2bn IPO of
Spanish oil and gas company
CEPSA takes recent cancellations
up to €4.5bn.
NO BETTER TIME
“The reason EM deals are usually
THEûlRSTûTOûGOûISûTHATûDECENTû
sized ones need both the EM
accounts and a smattering of
generalist accounts. In volatile
times they lose that generalist
interest,” an ECM banker said.
"UT ûDIFlCULTûASûTHEûMARKETû
presently is, it could be as good a
time as any for certain EM deals.
One head of ECM said that
while current conditions
REPRESENTûAûSIGNIlCANTûCHALLENGEû
for EM deals, there was no
guarantee that waiting would
lead to a better welcome as
there is no obvious macro event
that could boost sentiment
overall and these names have
NOTHINGûINûCOMMONûWITHûAû5+û
LUXURYûCARûCOMPANY
He emphasised that issuers
have been fully briefed on the
low chances of a successful
outcome and understand that
THEYûMAYûNEEDûTOûBEûmEXIBLEûONû
valuation.
RARE ACCESS
Others point to the strength of
each individual equity story
over their common status as
emerging market companies –
in contrast to the cancelled
mOATSûFROMûDEVELOPEDûMARKETû
companies.
“Emerging market
sentiment is very weak right
now, but something like
Eurotorg will get done,” a head
of syndicate said. “It’s a decent,
high quality asset, in a
jurisdiction very few people
HAVEûEXPOSUREûTOv
Eurotorg, Belarus’s largest
SUPERMARKET ûISûEXPECTEDûTOû
begin bookbuilding on its
£300m London listing this week.
Also offering investors rare
ACCESSûISû+AZATOMPROM ûWHICHû
put out the feelers for
potential demand last week
when it published a
registration document for a
,ONDONû'$2ûLISTING
As the world’s largest
uranium producer, it’s easy to
see how its proposition could
protect it despite the current
market volatility.
“Cheap is not enough in this
market,” the head of syndicate
said, “You need to be cheap
and something else – cheap
and niche or cheap and have
ANCHORûORDERS ûFORûEXAMPLEv
In the case of Nova
Ljubljanska Banka, the resolve
to list this year comes down to
necessity. The European
Commission’s requirements
relating to Slovenia’s 2011
bailout of NLB require the
government to sell 50% of the
bank before the end of 2018, a
deadline that has already been
EXTENDEDûFROMûTHEûENDûOFû
2017. (^)