Magazine article Global Finance

Raising Capital with Depositary Receipts Requires Creativity

Magazine article Global Finance

Raising Capital with Depositary Receipts Requires Creativity

Article excerpt

Global Finance: What is the biggest issue facing the DR industry near-term?

Zafar Aziz: Innovation is very important for the DR industry. Using new DR structures to allow international investors to gain access to capital across borders continues to be a key goal for market participants. The DR structure remains a resihent method for raising capital, for use as a tool in mergers and acquisitions, and for accessing incremental investors.

GF: Can you give an example of a complex deal involving DRs?

Aziz: Deutsche Bank was appointed as the depositary bank for trivago's $330 million ADR [American Depositary Receipt] issue on Nasdaq, which was the largest DR capital raising by a company in Europe last year. This high-profile transaction was executed in a very short time frame and had a number of complexities. Founded in 2005, the issuer is incorporated in the Netherlands, but is treated as a Germany-domiciled entity for tax purposes. The Dutch shares needed to be made eligible to be held by the custodian in Germany (Deutsche Bank, Frankfurt) through a complex process with Clearstream Banking Frankfurt. This process involved dematerialization of the shares, under Dutch law the issuer's shares were in the form of physical global share certificates in bearer form, and could only be released following the execution of a private Deed of Issue by the issuer.

Prior to the closing, the issuer changed its corporate form from a Dutch private company with limited liability into a public limited company and changed its name from travel BV to trivago NV. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.