Question

Please edit, rephrase or add something to the following part of my report.

Question: Given the proposed expansion, that the current directors are not keen on putting in more capital – should the company consider new private equity or even perhaps listing on the stock exchange.

Answer: Going to the stock market by way of initial public offering would be the best option when the existing Directors are not interested in further equity investment. As a second option, it could agree with the private equity company to agree on a valuation of the business and stake sale to get additional equity .Both these options do not entail any interest burden on the company.

Answer 1

Going to the stock market by way of initial public offering (IPO)would be the best option when the existing Directors are not interested in further equity investment. However, that would also entertain public scrutiny of the company once it is listed. As a second option, it could agree with the private equity company to agree on a valuation of the business and stake sale to get additional equity. The private equity option would only delay the listing of the company since the private equity investors would eventually want to encash their investment - probably through the IPO route. Both these options do not entail any interest burden on the company.