BDO Sri Lanka organises roadshow in China in December to showcase local opportunities

As part of the global road show series BDO intends exposing Sri Lankan projects and opportunities to the business community of China, scheduled to be held in Beijing, Shanghai and other important regions in China, in December 2017. For the Sri Lankan business community aspiring to go global or form global partnerships, BDO Colombo office hereby opens gates to facilitate a business matchmaking platform starting with China. BDO is a global professional service providers’ network with 1401 offices in 158 countries speaking almost all leading global languages and is the fifth largest accountancy firm in the world and the third largest accounting firm in China. BDO generated global revenues of approximately $ 8.0 billion in 2016.

Following are excerpts of an interview with BDO Managing Partner Sujeewa Rajapakse:

Q: What is the nature of this proposed event?

A: The proposed event is designed to present exciting investment opportunities in Sri Lanka that are available and open for Foreign Direct Investor participation. Currently, Sri Lanka has a serious lack of long-term funding sources for businesses and entrepreneurs. In addition there is a dearth in large volumes of equity capital in Sri Lanka. This event is designed to attract much-needed long-term funding to re-energise the commercial sector of Sri Lanka.

Q: Why have you decided to conduct this event in China?

A: Our program of roadshows includes events at many destinations across the world. China is simply the first destination. As you know, Sri Lanka and China have long historical ties and now very strong commercial ties as well. Chinese investors have been one of the largest sources of investment in to Sri Lanka especially in the public sector and PPP programs of Sri Lanka. In addition China has recognised the commercial importance of Sri Lanka as an integral part of China’s Silk Road trading partnership strategy. Further, BDO has a very strong market presence being the third largest accounting and professional services provider in China.

Q: What type of investment activity are you looking to achieve?

A: We are not only looking for investment activity. Whilst the primary goal is to attract Foreign Direct Investment, trade related activity and outward investment opportunities for Sri Lankan’s is also looked at. The Roadshow will cover the following: Investment – equity investment, joint venture partners, etc.; technology partners; export markets; import suppliers; trade partners; debt finance; country entry strategy into China.

Q: Is debt financing required, can’t we just attract equity funding only?

A: Typically, investment funding comes as package deal of equity and debt financing. Further, some measure of debt financing reduces the total funding cost of the business on a WACC basis. In addition cost of debt provides tax cover thus reducing the overall cost of debt financing. Ideal capital structure of a corporate should be a mix of equity and debt financing.

Q: Can anyone in Sri Lanka have their projects presented at this roadshow?

A: Yes. We encourage anyone, individual or corporate, with viable projects that require financial assistance for roll out, expansion or diversification to submit details to us for vetting and shortlisting. In addition persons or corporates that require technology partners, export markets, import suppliers, trade partners and country entry strategy into China for outward investments, to make use of this wonderful opportunity to actualise their dreams.

Q: Is there any restriction on the type of investment projects that any person or corporate can submit?

A: From the perspective of business sectors, we have no restrictions whatsoever. The proposed investment projects can be in any business sector and be related to manufacturing or service related business. However, we do have restrictions on the size of the proposed investment projects. Short listing is limited to those who wants global partners for over $ 10mn as equity, $ 5mn as debt finance, and $ 20mn annual turnover in other categories.

Further, those whose projects fall below the qualification criteria may still apply to us and we will look at other solutions to their investment needs.

Q: When is this event scheduled to be held and where in China?

A: The proposed event is planned to be conducted in January of 2018. Currently we are planning on addressing multiple forums in key commercially important locations in China such as Beijing, Shanghai, Hanzhou andGuanzhou. This is subject to change as we may add further locations if need arises.

Q: Will the confidentiality of a proposal be maintained?

A: Absolutely. Firstly, we will sign a comprehensive confidentiality agreement with the proponents of all shortlisted projects. Secondly, proponents of short listed projects will be invited for deeper consultations by us. The consultative process will include the finalisation of disclosure restrictions of the proponent to ensure that the proponent remains protected. 

Q: Can the project proponents participate in the roadshow?

A: Not in the initial presentation roadshows done by us. This is because the forums we present at are private investor forums made up of selected investor groups. However, when firm interest has been expressed by an Investor, the investor and the proponent will introduce to each other to continue due diligence negotiations. We will be present at every stage providing corporate support for accounting services, secretarial services, transaction design, financial structuring, legal closure, financial closure and project commencement

Q: Will you have a substantial exposure to the right target audience with the appetite to partner with Sri Lankan corporates?

A: That is a very good question. Yes indeed, as we are conducting this event in collaboration with BDO China through whom we will have access to thousands of corporates and high net-worth individuals in international business desirous of finding new frontiers for expansion and global footprint. 

Q: Please explain as to how one can seek registration from BDO to benefit from the proposed roadshow?

A: We will publish advertisements on leading English newspapers shortly for the procedure to follow together with pre-qualification protocol. Also the business community will have access to a dedicated help desk via our website soon after the publication of advertisements in public domain both digital and print.