TL;DR
Executing a placement involves several key steps: determining the size, price, and timing; engaging with a lead manager for guidance; preparing disclosure documents; finalising a term sheet and launching the placement; coordinating settlement and share allocation; and updating the share registry.
Table of contents
Decide on the size, pricing, and timing of the raise.
The company's board and management determine the amount of capital needed, set the price per share for the placement, and decide on the appropriate timing based on current market conditions and the company's strategic objectives.
Engage with a lead manager to manage the placement.
Appoint a lead manager, usually a broker or investment bank, to provide strategic advice, assist in structuring the placement, and manage the overall process including investor targeting and distribution.
Prepare disclosure documents to comply with the ASX.
Develop and finalise disclosure documents that comply with ASX Listing Rules and other regulatory requirements, detailing the purpose of the raise, its impact on the company, and other material information for investors.
Finalise a term sheet and launch the placement.
Finalise the term sheet, which outlines the key terms and conditions of the placement, and officially launch the placement to potential investors.
Coordinate settlement and share allocation.
The lead manager coordinates the settlement process with the company, ensuring that new shares are allocated to investors according to the terms of the placement. This process involves managing subscriptions, collecting funds, and confirming allocations.
Update the share registry and issue shares.
Post-allocation, the company's share registry updates the share register to reflect the new shareholdings. The registry ensures that all changes are accurately recorded and, if applicable, issues new share certificates or updates electronic records.
Issue a cleansing notice.
Issue a cleansing notice confirming that the company has provided all necessary information to the market, as required under the Corporations Act. This notice is critical for allowing the newly issued shares to be traded on the ASX without the need for a prospectus.
Executing a placement involves several key steps but it's an efficient way to raise capital quickly from the market (at higher transaction costs and without considering existing shareholders). You can pair a placement with a shareholder offer (like an EO or an SPP) to diversify your capital raise and target new investors and existing shareholders.