Companies worldwide that issue debt or equity create a disclosure document called an offering memorandum when raising capital. Our consultants and securities attorneys have written and assisted with over 3,000 offering memorandums, spanning most of the world’s financial centers in over 50 countries. Our team assists both small and large companies, including start-ups raising under $1 million to multi-national firms and banks raising many billions. The drafting of an offering memorandum is essential if one is seeking to raise money from traditional funding outlets. Without such a disclosure memorandum, it will be hard to procure capital. The offering memorandum – also known as just an “OM”, will detail essential information of the securities issuance and the investment objective. The offering memorandum is the single most important component – certainly the most important document – after a company writes a business plan.
Within the offering document is information such as the type of securities being offered, the price, the purchase terms, and general business and corporate information about the issuer. Aside from the securities information, an OM will detail the company’s utilize risks, those that could cause the company to become insolvent or go under. A solid offering memorandum document will highlight the company’s core position and stregth, and prove to investors that the issuer can generate income for its investors. Handing an investor an offering memorandum for investment consideration can also bring credibiility to the company as the OM shows one has done some form of due diligence to raise capital to get to this milestone.
Riyadh Offering Memorandum
A disclosure document like an offering memorandum can be written for a debt offering or an equity issuance, or a combination of both.
Equity: In an equity offering a company will issue stock in the forms of shares. Funds like hedge funds or other investment funds also issue participating shares. In an equity offering a company issues stock in the form of shares or units. Purchasers will then have an ownership stake in the company. However, just because an investor has an ownership stake does not mean they will have any power or sway over the issuer. Many funds, for instance, that offer shares do not grant voting rights. While real estate funds, hedge and mutual funds often sell equity, they do not allow investors to be active in the day to day operations or vote, unlike in publicly traded companies where one can often vote on company matters. Such details of an equity issuance can be found in the company’s offering memorandum, which will disclose features such as voting rights and payout times. The offering memorandum will highlight the benefits of investment, but one should always ask questions such as if voting rights are granted and other important matters.
Debt: Debt issuance is popular worldwide. Both private and public debt is issued daily and includes securities such as notes and bonds, and specialty debt like convertile bonds or notes (convertible debt). Debt instruments can have many varying features, including the interest rate and maturity date, zero coupon bonds, and differing rules from public to private offerings. Companies that will clear their transactions with a central depository like Euroclear and Clearstream in Europe or DTCC in the United States will need to structure their offering memorandum accordingly.
Our team of securities lawyers and consultants can assist with your equity and debt issuance offering memorandum needs.
Global Offering Memorandum
Offering memorandums are used worldwide by issuers raising capital from Hong Kong and China to the Cayman Islands. Entities that utilize offering memorandums as their disclsoure document consists of nearly every type of entity worldwide that seeks to raise money for their ventures. Corporations of all types, LLC or limited liability companies, limited partnerships or LP, write and use offerign memorandums to solicit investors.
An essential componnet of any offering memorandum is the “contract” between the issuer of securities and the purchaser of securities, called the “subscription agreemenet”. The subscirption agreement is a synopsis in a way of the entire offering memorandum. It shows the purchase price of the securities and where or how to send funds to the issuer when buying the debt or equity. Within or near the subscription agreement is the investor questionnaire, whcih any potential purchase must fill out. The investor questionnaire will help determine if the potential investor is suitable to invest. Both the investor questionnaire and the subscription agreement are essential to any offering memorandum, an dindeed an investor can sign the subscription agreement and make payment for the securities all be reading through the offering memorandu.
Prospectus’ team of consultants and lawyers can help draft your Riyadh offering memorandum for either debt or equity issuance in an effective, fast and cost affordable way.
- Prospectus Writing
- IPO Stock Exchange Listing
- Bonds Offerings
- 144A Reg S Offerings
- Hedge Funds and Mutual Funds
- Private Placement Memorandum
- Offering Circular
- Explanatory Memorandum
- Information Memorandum
- Fund Setup Formation
- Securities Identifiers
- Registration and Filing
- Legal Work
- Business Plans