Financing Proposal
WU Shizhi 1155068485
Company background
Property Holdings Ltd is a real estate owner and developer. The group is one of the largest property developers in China. It develops and sells residential properties. It also operates in hotel and commercial properties industry. Agile has land in Hainan, Shanghai, Nanjing, Changzhou, Chengdu, Xi’an, Chongqing, Shenyang, Tianjing, Guangzhou, Foshan, Zhongshan, Huizhou and Heyuan.
Ownership structure
62% stock shares of the company are held by Top Coast Investment Ltd whose major shore holder is the family of the founder of Agile. The second largest shareholder JP Morgan Chase & Co holds 4.38%. Dimensional Fund Advisors Ltd and Blackrock hold 1.18% and 1.16% shares,
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Agile went public at the end of 2005. After that Agile issued several bond denominated in US dollar. In 2006, it made a follow-on offering. In 2014, it made a rights issue. In the recent two years, Agile began issuing domestic bond in mainland China. The details of the deals since Agile’s initial public offering are listed below.
Instrument | Issue Date | Terms | Reasons for tapping the markets | Initial Public Offering | 12/15/2005 | | Issue Size | 1.1bn shares | | The Group proposes to use the proceed to acquire land and property projects to build up the land bank of the Group. | | | | Currency | HKD | | | | | | Price | HKD 3.30 | | | | | | Total Proceeds | HKD 3.6bn | | | | | | Market | Hong Kong equity market | | | | | | | Straight Bond | 9/15/2006 | | Issue Size | USD 400mn | | The bond can supplement the Group’s funding for its expansion. It will improve the cash flow requirements and debt maturity profile. | | | | Currency | USD | | | | | | Coupon | 9% | | | | | | Tenor | 7 | | | | | | Maturity Type | Callable | | | | | | | Follow-On Offering | 11/13/2006 | | Placing Shares |
The company’s leverage ratio is 28% - 72% of its assets are financed by common equity and the company was profitable in the last reporting period. The company should easily raise additional funds from creditors and a convertible debenture will be an appealing venture for creditors who would want to purchase stocks of the company in the future.
James Gitanga was not sure about the unusual capital structure of the Company, avoiding the long-term debt. We believe that the long-term capital structure across the industry was pre-determined by the high capital expenditures and steady cash inflows. Thus, issuing long-term debt was more preferable. Besides, by issuing debt they would enjoy the tax shield since interest on long-term debt is tax-deductible.
2. New bank credit facility, 600 million cash on hand to take advantage of opportunities that may arise
Investors have a number of development options in this community. Since it has remained primarily residential for years, there are many different vacant lots developed. The community's real estate prices are rising, so investors have the option of just buying the lot and leaving it vacant until they sell it.
The additional funds, especially under 3, may enable the firm to become more current on its trade credit. Also, the bonds will no doubt be subordinated debentures.
As shown in the ratios chart, working capital has increased by $13M. Maturities of short-term investments and cash flow from operations are projected to be sufficient to sustain the company’s overall financing needs, including capital expenditures. The following corporate strategic plan identifies a project that needs financial backing.
S198A(1): The board of directors has discretion as to when and how to issue shares
* Taking on debt gives the company the ability to use cash for projects and short term investments.
Fosun invested $55M in SJKI’s preferred stock, which entitles Fosun to receive a yield of 3%. The total of the accumulated unpaid yields is approximately $30M.
As far as the group, I am hoping to make an alliance with Lomas de Poleo resident(s), Pedro Zaragoza and Global Business Developer. If the wall is built on the land that would hinder in investments of monetary value. The text refers to a difference of opinion between who rightly owns the land but I hoping to convenience the Lomas and Zaragoza to put their differences aside to cooperate. Knowing that if the wall is built either one lose out on any deal that Global Business Developer’s would have offered.
As shown in the ratios chart, working capital has increased by $13M. Maturities of short-term investments and cash flow from operations are projected to be sufficient to sustain the company’s overall financing needs, including capital expenditures. The following corporate strategic plan identifies a project that needs financial backing.
AirJet Best Parts, Inc. would like to issue 20-year bonds to obtain remaining funds for the New Mexico plant. The company currently has 7.5% semiannual
Depending on how much additional investment needed and what will be the payback period. Another cash flow statement will be needed for further reviewing to decide whether additional funding will be a good
* A broader capital base gives the company more access to credit which gives the company an option to venture into new business opportunities
Over the last 13 years, since the publication of Agile Manifesto, Agile has become very popular and there has been a steady rise in the adoption of agile development methodologies resulting into an increased volume of successful projects and highly motivated and self-organized IT development teams.