Upward Trajectory - JSE MAGAZINE

Upward Trajectory

Computershare’s local expertise and global resources support complex corporate actions to help businesses grow with confidence

A company’s corporate objectives are growth oriented. They want to be in capital markets that are most liquid, where global exposure plays to its benefit. If mergers and reorganisations haven’t yet taken place, they could in the future. A company will need to ensure that it is set for success and that every detail of its complex transaction can be closely managed to meet its business objectives.

Executing a global corporate transaction means navigating a regional maze of legal requirements, market frameworks and practices, and ever-changing regulatory climates. Underpinning this is a requirement to understand and continuously monitor changing regulations and market practices, and stay abreast of innovative solutions, which speaks to the management of corporate transactions across multiple jurisdictions, not to mention the multilingual and multicultural investor communication needed.

What’s required is a superior team with boots-on-the-ground experience; one that knows how to work closely with a range of issuers and their broader legal and advisory teams, to closely manage a chain of interconnected activities according to a detailed timetable and end-to-end implementation plan.

With the increasingly global nature of companies and their securities, it is also crucial that investors around the world that are affected by the transaction will have access to support where they most need it. A company will also want to have the benefit of the administrative convenience, and innovative technology to take its diverse shareholders on the journey with them.

Companies with multi-jurisdictional exposure should seek out a global issuer agent to navigate all legal and market requirements

ONE PROVIDER TO HELP NAVIGATE A COMPLEX ECOSYSTEM
A critical first step is to seek out a global issuer agent that is perfectly positioned to support companies that do business in the global markets, as well as their diverse set of shareholders. Only deep-rooted knowledge, comprehensive international capabilities and long-standing relationships with key stakeholders globally, from lawyers to sponsors, financial market infrastructures and other third-party agents around the world would leave very little to chance.

Corporate advisers will likely point out issuer agents with links to major global jurisdictions and some of the major historical transactions in their portfolio. A few of these complex and ground-breaking corporate events have taken place in the past two years alone, making global headlines. These include AB InBev SAB, Naspers Prosus, Karooooo, Investec Ninety One, Pioneer Foods and PepsiCo, Montauk Energy, Deutsche Konsum REIT-AG and Textainer Group Holdings, as a few examples.

Cross-border transactions require discipline, flexibility and a high level of integrity and professional delivery

Generally speaking, there are three critical phases for a corporate action, namely consultation and strategy, project execution and project conclusion. As no two transactions are the same, a cookie-cutter approach would be unlikely. A tailored solution would have had to be created, encapsulating highly technical and intricate processes across time zones, language barriers and differing legal, regulatory and compliance frameworks. There would be a consultative approach to the planning between advisers, sponsors and the issuer agent in developing a tailored strategy that matches the requirements of their event. Ideally, this issuer agent would also support the corporate action with its international capabilities, such as meeting services and proxy solicitation, shareholder communications, entity management, unclaimed asset services and more. By seeking out an issuer agent as a single, global service partner that can help the company navigate regulatory and capital-market structures to successfully manage its corporate event and the supporting services that the company requires, it eliminates the confusion and additional efforts required to organise multiple service providers.

TECHNOLOGY AND INNOVATION THAT CAN BE RELIED ON
To support the expertise, the company will also require premier technology and innovation that translates into cost-savings and value that benefit both them and their shareholders. Maintaining communication with its share-holders, particularly during corporate actions, puts a heavy burden on a company’s resources.

The sensitive nature of the projects undertaken requires discipline, flexibility and a very high level of integrity and professional delivery. Securing online solutions can make it easy for shareholders to respond as required by the transaction and enhance shareholder communication by means of an omni-channel approach, which will ensure that shareholders feel confident in the process. Once the deal is closed, the company also needs to look at technology that continues to serve their shareholders. xSettle, for example, is a global technology that has close links to local securities deposit-ories to accelerate the transfer of securities between markets, and enables global market participants to meet their settlement deadlines. It’s a secure, online-instructions portal that allows shareholders initiating cross-border movements to see transactions completed within 24 hours. This gives users certainty that their settlement and trade deadlines will be met. In a nutshell, it makes cross-border settlements faster, safer and more cost-effective.

Global companies also need to be forward-thinking when it comes to entity management. It becomes increasingly difficult for corporates to spend more time on strategic priorities when managing their distributed legal entity footprint, which can be an administration burden. They should look to invest in an issuer agent’s technology to offload global entity and subsidiary management, including a complete outsourcing model, or to enable their in-house resources to keep entities consistently up to date everywhere. When it comes to a cross-border transaction, the stakes are high. Companies need to be sure to appoint the best-suited providers, where they can be certain that their needs are met and nothing is left to chance.


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