Factoring firm IFS Capital set to raise capital through an Initial Public Offering (IPO)
By Jon Fernquest
Businesses
sometimes go through hard times Sales may be low but a business still needs to pay their employees and purchase supplies to keep the business operating.
Customers delay payment, cash runs low and a crisis results.
The business needs to quickly raise cash (working capital) to pay urgent bills and keep the business going or else go bankrupt.
Today's article is about a "factoring firm" that helps businesses raise cash by buying the right to collect money that others owe the business (accounts receivable).
factoring - when a
business
gets quick money it needs to do business by selling the rights to money
it will collect in the future (accounts receivable) at a discount (See Wikipedia)
a factor - a business that does does factoring, buys accounts receivables from other businesses
raise capital - get the investment money that a business needs
raise cash - get the money that you need
IFS Capital - a Singapore financial services company with operations in Thailand, Malaysia, Hong Kong, and Indonesia (See website and history and Wikipedia)
IPO (initial public offering) - when a company sells stock shares on a stock exchange for the first time
working capital - money available to a business to pay for day-today business operations, management of working capital involves managing inventories, accounts receivable and payable and cash (See Wikipedia)
urgent bills - money owed to others that must be paid quickly
go bankrupt - when a business does not have enough money to continue operation anymore and ends its existence
a right - something that you by law is yours to have or to do
accounts receivable - money that others owe to a business
a factor - a business that does does factoring, buys accounts receivables from other businesses
raise capital - get the investment money that a business needs
raise cash - get the money that you need
IFS Capital - a Singapore financial services company with operations in Thailand, Malaysia, Hong Kong, and Indonesia (See website and history and Wikipedia)
IPO (initial public offering) - when a company sells stock shares on a stock exchange for the first time
working capital - money available to a business to pay for day-today business operations, management of working capital involves managing inventories, accounts receivable and payable and cash (See Wikipedia)
urgent bills - money owed to others that must be paid quickly
go bankrupt - when a business does not have enough money to continue operation anymore and ends its existence
a right - something that you by law is yours to have or to do
accounts receivable - money that others owe to a business
Economics
FINANCE
Factoring firm plans IPO
29/12/2009Darana Chudasri
IFS Capital, a factoring and financing company, plans to raise at least 200 million baht in an initial public offering next year.
Tan Ley Yen, the chief executive of IFS Capital (Thailand), said it would float 120 million shares at one baht par value in the IPO, representing 25.53% of paid-up capital after the offering.
paid-up capital - money
received by a company for stock shares that it has already
sold
an offering - when a company offers stock shares or bonds for sale
an offering - when a company offers stock shares or bonds for sale
Funds raised will be used for working capital and business expansion. The company submitted its regulatory filing for the offering yesterday.
"The IPO will allow us able to raise funds at relatively low cost, helping to boost our overall competitiveness. We also want to raise our profile to boost our customer base," Mr Tan said.
working capital -
the money used by a company for day to say business operations, for
paying employees, pay other expenses, and to finance a stock or goods
and raw materials on hand
submit - officially give a document to an organisation
submitted its regulatory filing - gave the government all the paperwork and documents needed before it could sell stock
raise our profile - make our name better known
boost our customer base - increase customers
submit - officially give a document to an organisation
submitted its regulatory filing - gave the government all the paperwork and documents needed before it could sell stock
raise our profile - make our name better known
boost our customer base - increase customers
IFS Capital provides factoring services for both local and foreign trade receivables. Its other financial services include confirming letters of credit (LC) and trust receipts (TR), inventory and contract financing for companies in the manufacturing and service sectors.
Customers include large and small firms from the auto parts, electronics, food and beverage, medical, paper and packaging sectors.
receivables, trade receivables - money owed to a
business
confirming - checking to make sure it really exists and is valid
valid - is acceptable, can still be used, has not expired
letters of credit (LC) - a letter from a bank that agrees to pay money for a customer buying imported goods
trust receipts (TR) - a document handing over ownership of goods that a company has received to a bank until the company can pay for them
confirming - checking to make sure it really exists and is valid
valid - is acceptable, can still be used, has not expired
letters of credit (LC) - a letter from a bank that agrees to pay money for a customer buying imported goods
trust receipts (TR) - a document handing over ownership of goods that a company has received to a bank until the company can pay for them
Factoring is a niche service commonly used by smaller companies to manage cash flow. A business can sell an account receivable or invoice to a third party known as a factor in exchange for immediate cash. The factor profits by purchasing the receivables at a discount.
niche service - a special service
for a small group of customers
manage cash flow - make sure that the money coming into a business is enough to run the business, enough for day-to-day business operation
account receivable - money owed to a business by customers who have not paid yet
invoice - a list of goods and services that the customer has bought and must pay for
a third party - another organisation or person involved in an arrangement or situation (in addition to the main two organisations or people involved)
a factor - a business that does does factoring, buys accounts receivables from other businesses
immediate cash - getting money right now, without any delay or wait
a discount - reducing the price of something
purchasing the receivables at a discount - buying the receiveables at a reduced price
manage cash flow - make sure that the money coming into a business is enough to run the business, enough for day-to-day business operation
account receivable - money owed to a business by customers who have not paid yet
invoice - a list of goods and services that the customer has bought and must pay for
a third party - another organisation or person involved in an arrangement or situation (in addition to the main two organisations or people involved)
a factor - a business that does does factoring, buys accounts receivables from other businesses
immediate cash - getting money right now, without any delay or wait
a discount - reducing the price of something
purchasing the receivables at a discount - buying the receiveables at a reduced price
Mr Tan said IFS Capital had nearly 20 years of experience and offered loan approvals within seven to 10 working days, fund transfers within 24 hours of approval and credit lines of up to 90% of the value of the trade document.
Customers can monitor the status of their transaction in real time through the company's online e-Factoring system.
loan approvals - when the bank
officially decides to make a loan to a business
fund transfers - moving money from one person or bank account to a different one
credit lines - money that a company can borrow from a bank if it needs to
trade document - an official document that gives the right to receive money in the future from goods sold and traded
in real time - right now, without a delay
monitor in real time - what something happen as it happens, without a delay
a transaction - buying and selling something
monitor - watch and check something as it happens
monitor status - check the condition or situation
monitor the status of their transaction in real time - watch what happens to their transaction happen as it happens
fund transfers - moving money from one person or bank account to a different one
credit lines - money that a company can borrow from a bank if it needs to
trade document - an official document that gives the right to receive money in the future from goods sold and traded
in real time - right now, without a delay
monitor in real time - what something happen as it happens, without a delay
a transaction - buying and selling something
monitor - watch and check something as it happens
monitor status - check the condition or situation
monitor the status of their transaction in real time - watch what happens to their transaction happen as it happens
IFS is 98% held by IFS Capital (Singapore), a subsidiary of the Phillip Capital Group. The IPO will reduce IFS Capital (Singapore)'s shareholding in its Thai subsidiary to 73%.
KT Zmico is the financial adviser and lead arranger for the IPO, with shares expected to begin trading on the SET in the second quarter of 2010.
IFS Capital aims to provide 18 billion baht in financing credit in 2010, an increase of 30% from this year. It expects to post 2009 net profits of 71 million baht on credit facilities of 13.5 billion to 14 billion baht.
credit facilities -
an arrangement to borrow money from a bank up to a certain amount for a
certain length of time
(Source: Bangkok Post, Factoring firm plans IPO, 29/12/2009, Darana Chudasri, link)
