UNIVERSITI TEKNOLOGI MARA
Semester Sept 2011 – Jan 2012
Prepared for: Datin Maziah Onn
Mohd Izham bin Ismail2010819748
Izzaty binti Mohd Rashid 2010627392
Mohammad Azwanie Naim bin Mohammad Asri2010665356
Mohd Hafizi bin Nor Salin2010658138
Mohd Zulhairi bin Abd Rani2010851382
Alhamdulillah, our first and utmost gratitude to Allah SWT for giving us the strength to complete this assignment smoothly and on time. We would also like to acknowledge the suggestion and guidance of Datin Maziah Onn for all her advice, and encouragement throughout the whole process of completing this project. This assignment would not have been possible without her assistance. Special thanks also to the entire group member who have contributed a lot of effort and time in order to complete this project. Everybody has given the best team work for this assignment by completing each task assigned to each and everyone with great details and perfections. We are also indebted to many friends and classmates who have given us great ideas and proposal about this project. Without their support, it would have been hard for us to complete this assignment. Lastly, special thanks to our family who has indirectly supported us to pursue this degree. Their love and encouragement had no doubt given us the strength to consistently work hard for the betterment of our future.
TABLE OF CONTENT
No. | Content| Page|
1| 1.0 Introduction on company background and project| 4| 2| 2.0 Raising funds options2.1 Capital Financing 2.2 Debt Financing | 4-5| 3| 3.0 Capital Financing 3.1Raising of Share Capital for Private Company 4. Procedures 3.12 Advantages3.13 Disadvantages3.2 Going Public3.21 Procedures for conversion of status of a company3.22 Options to raise funds for public company3.221 Public Issues3.222 Offer for Sales3.223 Rights Issues3.23 Advantages3.24 Disadvantages| 5-11| 4| 4.0 Debt Financing 4.1 Bank Loans4.11 Procedures 4.2 Debentures 4.21 Procedures4.3 Charges 4.31 Types of charges4.32 Priority of charges4.33 Registration of charges| 12-17| 5 | 5.0 Conclusion| 18|
6| 6.0 Recommendation| 19-20|
7| References| 21|
8| Appendix| 22-24|
Koat Agamah Sdn Bhd has secured a mega project to construct an iconic bridge linking Thailand and Malaysia. According to South Caroline Bridge Design Manual (2006), in addition to the costs developed for the structure of the bridge, there are other additional costs that need to be considered by the company in order to have an overview of the total cost involved in this project. They are;- 1. Preliminary Engineering Cost
2. Utilities Cost
3. Right-of-Way Cost
4. Traffic Control Cost
5. Construction Engineering and Contingencies Costs
6. Provision of cost for Project Scope Changes
This clearly shows that the project secured by this company needs extra funds in order to finance the whole project until it is completed. Due to this, Koat Agamah Sdn Bhd is now seeking for advice regarding options and various sources of project financing available to help finance the project.
2.0 RAISING FUNDS OPTION
There are several ways for Koat Agamah Sdn Bhd to raise funds for project financing and those several ways can be divided into two main categories. They are capital financing and debt financing.
3.1 Capital Financing
Capital Financing is basically achieved by way of issuing shares to shareholders. It is an avenue for a company to source funds externally. For private company, the amount that can be raised maybe limited as compared to the public company.
Some company may prefer this type of financing due to the fact that the cost of capital is fairly cheaper than the cost of debt since interest rates of borrowing are expensive.
However, certain shareholders...