Description of business:
AAA is a newly incorporated investment company, which has been established as a platform for investors looking to access growing markets in Southeast Asia.
The Company intends to invest in companies with at least the majority of their operations (or early stage companies that intend to have at least the majority of their operations) in Southeast Asia with an initial expected focus on Malaysia, Thailand, Indonesia and Burma. The Company intends to invest in a portfolio of companies with an initial focus on companies that operate (or early stage companies that intend to operate) in industries with likely high growth potential including, but not limited to: agriculture, forestry and plantation, mining, natural resources, property and/or technology.
It is the Directors intention to source and identify potential investments through their own research and network of contacts and possibly strategic partnerships with other companies or persons who can assist the Company in sourcing and identifying potential investments. Investments are expected to be mainly in the form of equity although investments may be by way of debt, convertible securities or investments in specific projects. In the case of equity investments, the Directors intend typically to take minority positions (with suitable minority protection rights) primarily in unquoted companies. Investments will therefore typically be of a passive nature. However, whilst the Directors intend that typical investments will constitute minority positions in investee companies, should the Company make majority investments, the Company may seek participation in, or membership of, the management or board of directors of such an entity with a view to seeking to improve the performance and growth of the business.
The Directors expect that initial investments will typically be £500,000 to £1,000,000 in each project with a target internal rate of return of at least 20 to 30 per cent. per annum. It is likely that a substantial portion of the Company's financial resources will be invested in a small number of companies, however the Company has not excluded the possibility of making just one investment. Depending on the size of investments, they may be deemed to be reverse takeovers for the purposes of the AIM Rules, which would require shareholder approval and re-admission of the Company, as enlarged by the acquisition, to trading on AIM.
In order to mitigate investment risk, the Directors intend to carry out a thorough due diligence process in evaluating each potential investment including: site visits, analysis of financial, legal and operational aspects of each investment opportunity, meetings with management, risk analysis, review of corporate governance and anti-corruption procedures and the seeking of third party expert opinions and valuation reports where the Directors see fit.
The Directors will apply investment criteria including: the potential for capital growth and/or the potential for profit generation with a view to receiving dividend income over time, high attractiveness to potential buyers of the company in question in order to facilitate exits and a strong and experienced management team.
Given the time frame to fully maximise the value of an investment, the Board expects that investments will be held for the medium to long term, although short term disposals of assets cannot be ruled out in exceptional or opportunistic circumstances. The Directors intend to re-invest the proceeds of disposals, in accordance with the Company's Investing Policy unless, at the relevant time, the Directors believe that there are no suitable investment opportunities, in which case they will consider returning the proceeds to shareholders in a tax efficient manner.
All Asia Asset Capital Limited ("AAA" or the "Company")