 |
|
|
| |
|
|
| |
|
|
| SEGMENTAL
REVIEW |
| CORPORATE
FINANCE (CONTINUED) |
| |
|
| Operational
review |
SDF demonstrated significant market leadership
this year in a growing and developing debt market in South Africa.
The SDF team was instrumental in driving a greater awareness
of debt and its potential impact on corporate capital structure,
through innovative structuring and the introduction of new sources
and new types of debt to the South African market.
Following the success of the first Euro high yield bond for
a South African corporate, pioneered by SDF, it advised on the
first South African management buyout funded by Eurobonds. The
high volume of leveraged transactions internationally has raised
the profile of the high yield bond market to such an extent
that it is now being considered as a strong alternative source
of funding in the local market. This provides South African
corporates with the opportunity to tap the international capital
markets and serves as a catalyst in the local funding arena,
by introducing additional competitive pressure on local institutions.
Nowhere are these factors more evident than in the advisory
and lead arranger role Brait performed in the debt restructuring
for Foodcorp, and in the recapitalisation and management buy-out
of the Reclamation Group. Both of these transactions involved
the restructuring of the company's capital structure, lowering
their weighted average cost of capital, and involved the assumption
of debt of varying seniority from senior to subordinated and
mezzanine. The debt package, in both deals, included the raising
of a high yield Eurobond in the international capital markets.
The Foodcorp Eurobond reopened the high yield market in June
2005 and both this and the Reclamation bonds, were well received
by European investors. They have traded above par, since issuance,
and were two of the first four High Yield Eurobonds issued by
South African companies.
SDF's ability to identify opportunities and to design innovative
funding structures, using various funding sources and instruments,
presents strong opportunities for continued earnings growth.
Its market leadership, experience, international relationships
and expertise gained through, amongst others, its facilitation
of two of the four Eurobond offerings by South African issues
to date, should contribute in this regard. |
| |
| |
| Profit from operations |
 |
| |
| Strategic
initiatives |
| The immediate focus for Corporate Finance, for
the coming year, is to execute a number of interesting, high
potential deals which are currently in the pipeline. In addition,
Brait will look to further broaden its capacity in capital market
products, services and investments. |
| |
| Page
up |
| |
|
|
|
|
|
|
| |
|
 |
