How to finance the exit of the financiers, Financial Management

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How to finance the exit of the financiers

The company would have to decide how to finance the exit of the financiers. Considerations comprise:

(i)  Selling shares to the public will result in dilution of control

(ii)  Additional finance may be required to buyout financiers. This will impact on the capital structure, gearing and financial risk.

(iii)  Company will need valuing which may be difficult.

(iv)Agreeing a share price will also prove to be difficult, as management want the lowest price and financiers want the highest price.

(v)  Company may be forced to float.

 


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