private placement

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RItu (Querist)
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20 March 2008 sir, i would like to know when a company goes for a private placment/private equity then what are the preliminary steps to initiate the process, apart from deciding the amont to be brought in?, what are the practical things involved in it

akash

akash (Expert)
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22 March 2008 hey ritu hii ,
firstly private placement is rasing capital through private mode in place of going to public by issue of securities private placement is made to selected investors like banks,mutual funds,insurance companies.The placement does not have to be registered with the Securities and Exchange Commission. In many cases detailed financial information is not disclosed and a the need for a prospectus is waived. Finally since the placements are private rather than public, the average investor is only made aware of the placement usually after it has occurred.

RItu

RItu (Querist)
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22 March 2008 thank you ,
my query extends furhter to the question that what are the ground works or things need to be done prior and after such placement on the part of the company??

R.V.RAO

R.V.RAO (Expert)
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28 March 2008 ensure your memorandum and articles contain a clause authorising your company to receive private place ment funds.

necessary approvals if needed from your existing lenders to be obtained.

the board of directors study the terms and conditions and passa resoltion to authorise a director on behalf of the company to enter necessary agreement for private placement.
inform rbi if prior approval needed as per RBI regulations.
if a listed co. follow listing agreement clauses.
R.V.RAO

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