Role of Warburg Pincus in emerging markets IPOs and secondary market liquidity

Warburg Pincus played a huge role in the growth and development of emgs by investing a large amount of funds as well as contributing a significant level of strategic input and design into the company after taking the company over from a third party. They were responsible for much of the improvements and advancements of the company, both through management and funding of research and technology.

Warburg Pincus was trying to take emgs public because by taking emgs public and selling stock in the company, capital could be raised easily and a higher level of legitimacy would be created for emgs and their technology.

Secondary market liquidity is an important consideration in the decision to take emgs public because without the company having a certain level of liquidity on the market, there would either be no interested buyers, or buyers, but who would only be willing to spend a lesser amount than would be beneficial to Warburg Pincus, and in turn, emgs.

The IPO process is the process a company goes through that will allow them to offer common stock or shares of the company for sale to the public for the first time. The role of an underwriting firm in this process is to decide which types of stock to offer, which price would be most well received by the public, and the precise time to release the securities to the market to make them most successful.

There are a number of pros and cons associated with each potential listing of emgs, whether with Oslo or in the United States. While an Oslo listing will be less expensive and less difficult for emgs, the better overall value and benefits will surely be present for emgs if they choose to list on the NYSE.

There are difficulties with listing on the NYSE. However, the benefits far outweigh the difficulties. Some of the cons of listing on the NYSE are that the upfront cost is far higher than listing on Oslo; attorneys will need to be hired, as well as new accountants and a new administration. The underwriting fee is almost double in the U.S. As it would be on Oslo. However, even if emgs is listed on Oslo there may be a number of U.S. share holders which will result in the same need for attention to the U.S. sector for accountants, administration, a quality board of directors and attorneys to ensure a smooth business transaction and follow-up.

Listing with Oslo may change emgs in ways that may not be beneficial. Oslo listing requires that 40% of the representative board of emgs be female, which it currently now is not. This will require a major change in who is currently in charge of the company and may change the direction the company is trying to take.

Oslo will potentially change the direction of the company in other ways as well. For example, the Oslo market weighs heavily in gas and oil and will likely cause emgs to be grouped with these industries rather than as a technological company of uniqueness. When the gas or oil markets fluctuate, emgs may be affected very directly by massive sells. This will not happen in the U.S. market because emgs will be able to be associated with other technological companies more similar to itself and will maintain a level of uniqueness.