Gnosis Company Limited was formed in Y2004 by the partners who have strong experiences in the banking and finance industry and international advisory firms. Our clients could find their corporate solutions with our solid experienced advisory team who are ready to advise and walk along with them to make their business sustainable wealth and reach their vision. We also provide the proven training programs to transform you and your company to the next level of success.
1. Corporate Advisory Services &
Corporate Trainings
S et h a ph ong P h adu ngp is u th
Man a gi ng D irec to r, G n os is C om p a ny Li m ited
2. “Your Success Starts Here.”
Gnosis Company Limited was formed in Y2004 by the partners who have
strong experiences in the banking and finance industry and
international advisory firms. Our clients could find their corporate
solutions with solid experienced advisory team who are ready to advise
and walk along with them to make their business sustainable wealth and
reach their vision. We also provide the proven training programs to
transform you and your company to the next level of success.
3. Sethaphong Phadungpisuth
Present
Managing Director, Gnosis Company Limited
Executive Consultant, RSM Advisory (Thailand) Limited
Independent Consultant, Institute for Small and Medium Enterprises
Development
Past
Assistant Manager, RSM Nelson Wheerler Limited
Financial Modeller, Glow PLC.
Account officer, Special Asset Management, Bangkok Bank PLC
Assistant Financial Analyst, State Street Bank (USA)
Education
MS. International Business and Cert.in Finance, Southern New Hampshire
University (USA)
BBA in Banking and Finance, Thammasat University
4. We walk with you every stage of
business lifecycle.
5. Corporate life cycle and the issues
faced
1. Start-up/ Emerging
• Preparing business plan/ improving
results
• Improving/ managing cash flow
(Cash flow planning)
• Accumulating funds for specific
business needs (Debt and Equity
financing)
• Selecting entity structure
2. Growth/ Expansion
• Protecting investment in business
(Budgeting and planning)
• Protecting against business risks
5
8. Corporate life cycle (continue)
3. Mature/ Prosperous
• Getting business valuation (Mergers and Acquisition)
• Risk management
• Structuring benefits for owners
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9. Corporate life cycle (continue)
3. Mature/ Prosperous
• Getting business valuation (Mergers and Acquisition)
• Risk management
• Structuring benefits for owners
4. Transition/ Exit
• Transaction planning
• Divestitures
• Retaining business
• Finding next venture
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10. Corporate Advisory Services
Corporate Finance Advisory Corporate Recovery Advisory Transaction Value Advisory
• Debt and equity placement • Debt restructuring • Merger and acquisition
• Fund raising • Bankruptcy and litigation advisory • Joint venture and alliances
• Project finance • Financial turnaround • Sales and divesture
• Market feasibility study • Loan portfolio management
Our products Our products Our products
• Financial Analysis • Due diligence and viability review • Valuation of acquisition targets,
• Business plan • Debt restructuring plan and term including bid pricing advice for
• Feasibility study sheet major transactions
• Structured financing • Valuation of businesses, shares,
and other interests for vendors
• Loan request package • Monitoring assignment
• Assessment of the value of
• Market research • Financial modeling
merger benefits
• Financial modeling • Turnaround plan
• Loan valuation report
• Information memorandum
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11. Corporate Finance Advisory
(Sample)
Financial Analysis Report
Executive summary and Key Data
Company overview i.e. shareholder list, management team, nature
of business, major customers, major competitors, etc.
Historical financial analysis i.e. Vertical and Horizontal, identify
the past performance in trend analysis
Financial ratios analysis
Predictor ratios indicate the potential for growth or failure
Profitability ratios
Asset management ratios
Liquidity Ratios
Debt Management Ratios
All above ratios will be compared with industry data (major
competitors)
Default Risk Model: the Altman Z-Score
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12.
13. Corporate Recovery Advisory
(Sample)
A financial advisor to prepare a debt restructuring
plan
Preliminary outline for a debt restructuring plan
Executive summary
Company overview
Industry analysis
Business performance review
Security and collateral review
Feasibility review
Reasons to propose the debt restructuring plan
Strategy for the debt restructuring
Monitoring the plan
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14. Transaction value advisory
Outline of the report
Introduction and scope of work
Company background
Current and historical trading
Future prospect (i.e. economic prospect, key
drivers, and industry analysis)
Cash flow projection and key assumptions
Discounted cash flow valuation
Share price and relevant issues (i.e. control
premium and marketability discount)
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15. What is Valuation Analysis?
Mergers & Acquisitions
Buy-Side engagement: How much should client pay to buy the
target?
Sell-Side engagement: How much should client receive from the
sale of target?
Divestitures: For how much should we divest this piece of our
company?
Fairness opinion: Is the price offered for the company fair to
shareholders?
Hostile defense: Is our company undervalue/vulnerable to a raider?
Public equity offerings (IPO/ follow-on placements)
For how much should we sell shares of our company in the public
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16. Valuation method
There are several ways to Methodologies
quantify value The Asset Approach
Not clear-cut science Accounting Value
Sensitive to assumptions and Adjusted Account Value
uncertainties
The Income Approach
Different groups may perceive
Discount future free cash flow
different value for the same
asset The capitalization of earning
Does not mean that there is no The Market Approach
correct value Comparable company analysis
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17. Valuation Methodology
and Firm valuation Terminal Value
= FCF year 8 (1 + growth rate)
1 2 3 4 5 6 7 8
MB EBIT (1-t) xxx xxx xxx xxx xxx xxx xxx xxx
+ Depreciation xxx xxx xxx xxx xxx xxx xxx xxx (Discount rate – growth rate)
Firm Value XXX Reinvestment (xx) (xx) (xx) (xx) (xx) (xx) (xx) (xx)
+ NO Assets xx = FCFF xxx xxx xxx xxx xxx xxx xxx xxx
- Net Debt (xxxx)
= Equity (xxxx)
Value/Share xxx Baht
Discount at Cost of Capital (WACC) = Cost of equity (E%) + Cost of Debt (D%) = XXX%
Cost of Equity Cost of Debt (after tax) Weights
E = x% D = x%
Risk Free Rate + Country Risk Premium Company default spread x (1 – tax rate)
+
(30%)
Risk-Free Rate + Levered Beta x Risk Premium + Size Premium + Company Specific
Risk Premium
Unlevered Beta for Sectors Firm’s D/E Ratio Mature Risk Premium Country Risk Premium
Source: Investment Valuation, 2nd Edition, Aswarth Damodaran
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18. Corporate Trainings
Financial Intelligence
+ Unlock the Finance Code
+ FI 123
FI 01 Basic Financial Knowledge
FI 02 Advance Financial Analysis
FI 03 Financial Budgeting
+ Facing the financial issues with
confidence
+ Finance for Executives
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25. Need further information, please
contact us
www.gnosisadvisory.com
twitter.com/gnosisadvisory
Thank you very much
sethaphong@gnosisadvisory.com
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Notas del editor
Generally, this phase, the business will be a private business funded by owner’s equity and perhaps bank debts. It will also be restricted in its funding needs, as it attempts to gain customers and get established.
Once a firm succeeds in attracting customers and establishing a presence in the market, its funding needs increases as it looks to expand. Since the firm is unlikely to be generating high cash flow internally at this stage and investment needs will be high, the owners will generally look to private equity or venture capital initially to fill the gap.
3. The growth starts leveling off. However, the firms attempt to maintain its position as long as possible. Creating new investment or finding new venture to add the company value will be required.
4. Firms in this stage will find both revenue and earnings starting to decline, whereas their businesses mature and new competitors overtake them. The firms have little need for new investments. In a sense, the firm is gradually liquidating itself.
However, not all firms go through these four phases, and the choices are not the same for all of them. It depends upon many factors such as the economic situation, company management and so on.
3. The growth starts leveling off. However, the firms attempt to maintain its position as long as possible. Creating new investment or finding new venture to add the company value will be required.
4. Firms in this stage will find both revenue and earnings starting to decline, whereas their businesses mature and new competitors overtake them. The firms have little need for new investments. In a sense, the firm is gradually liquidating itself.
However, not all firms go through these four phases, and the choices are not the same for all of them. It depends upon many factors such as the economic situation, company management and so on.
3. The growth starts leveling off. However, the firms attempt to maintain its position as long as possible. Creating new investment or finding new venture to add the company value will be required.
4. Firms in this stage will find both revenue and earnings starting to decline, whereas their businesses mature and new competitors overtake them. The firms have little need for new investments. In a sense, the firm is gradually liquidating itself.
However, not all firms go through these four phases, and the choices are not the same for all of them. It depends upon many factors such as the economic situation, company management and so on.
Corporate finance advisory
The goal is to provide optimal capital structures and financing options for companies at all stages of their capital life cycle.
Act as placement agent to assist clients with both secured and unsecured debt placement, as well as all forms of equity placements
To prepare a market study, we will analyse and advise the business opportunities and threats in depth.
We can set up a spreadsheet-based model of a project, asset or company. This work quantifies all factors of a project and allows financial analysis to be carried out.
Corporate recovery advisory
We review each detail of the business process and investigate all operations and practices. Due diligence will give a clear prospective of the situation and help the organisation to minimise risks and problems.
Representing clients in creditor negotiations
Alternatively, representing and advise creditors and creditor committee in maximising their claims.
Advise companies seeking to reorganise under court protection
Setting in reaching consensual restructuring of debt and payment terms
We assist our clients with maximising asset and enterprise value, making operational performance adjustments, and by capitalising the company, allow for financial turnaround.
Transaction value advisory
We provide clients with guidance relating to identifying, structuring, negotiating and financial potential transactions.
Our goal is to enhance earnings and build shareholder equity value.
We will prepare a full valuation report, including financial and economic analysis, an explanation of our valuation methodologies, and a value estimate of the company.
This is a draft outline of debt restructuring plan, that we had proposed to be a financial advisor.
Executive summary
Verify the business problem
Financial performance review
The alternative for the debt restructuring
Company overview
Company profile
Company management (i.e. company group structure, financing structure, revenue and cost structure and target market structure)
Industry analysis
Business performance review
Due diligence to all financial information such as asset, liabilities, and shareholder’s equity. Some adjustments may require. It is useful for financial projection assumptions.
Security and collateral review (i.e. adjusted book value following to due diligence, open market value and forced sale value)
Business feasibility review (SWOT analysis)
Reasons to propose the debt restructuring plan
Strategy for the debt restructuring
Draft debt restructuring plan by prepare the projection of free cash flow before financing. And propose the optimal alternative of debt restructuring.
Financial projections and sensitivity of cash flow project
Review and assessment of the debtors’ restructuring plan (if one has been prepared) and recommendations as to improvements or modifications to the plan.
Monitoring the plan (Cash monitoring plan)
Basically, to get the right share price, we need to understand the company’s current financial status and its projected plan. We used Discounted cash flow approach to value the company share price. And I will explain more in the next slide.
DCF is a method of evaluating an investment by estimating future cash flows and taking into consideration the time value of money.
Reinvestment is including Net working capital and Net Capital expenditure.
Free cash flow to firm. (FCFF)
Terminal Value is the value of any item at the end of a specified time period.
Cost of capital is the opportunity cost of an investment, i.e. the rate of return that a company would otherwise be able to earn at the same risk level as the investment that has been selected.
Risk free rate - A theoretical interest rate that would be returned on an investment which was completely free of risk. For example, the long term government bond rate.
Beta - A quantitative measure of the volatility of a given stock, mutual fund, or portfolio, relative to the overall market or the stock market.
Risk premium - The extra return that the overall stock market or a particular stock must provide over the rate on Treasury Bills to compensate for market risk.