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Frequently Asked Questions


Arka Projects
  1. Who is Arka Projects? What do they do?


  2. What is the firm's role for capital market transactions and who are the firm's target customers?


  3. Who are your partners and investors?


  4. How is Arka Projects different from other financial advisory firms?


  5. Who benefits from Arka Projects' advisory activities?



The Private Equity And Un-Rated Commercial Paper Industry
  1. What is private equity?


  2. Who can invest in commercial paper for an Arka Projects origination deal?


  3. What is the average size of an Arka Projects origination deal for commercial paper?


  4. What is a leveraged buyout?


  5. What is venture capital?


  6. What is mezzanine financing?


  7. Why are the returns in private equity typically higher than the public markets?



Arka Projects

  1. Who is Arka Projects? What do they do?

    The late Mr. Rex Koh Kim Chuan founded Arka Projects in 1985. Mr. Rex Koh was an ex-President of the Singapore Institute of Architects. His son, Bryan Koh Chong Ann took over in 1997 and focused the firm's business as a capital markets services and business advisory firm serving entrepreneurs. Bryan possesses a law degree from London University and a MBA from the Stern Graduate School of Business, New York University. Bryan has many years of working experience in commercial/investment banking and equities research in Singapore and Asia.

    Since 1997, Bryan Koh has used his experience gained from financial institutions in Singapore and the region to service entrepreneurs. Since 1997, Arka Projects has demonstrated consistent delivery of quality in previous consulting assignments. As a result we have increasingly gained acceptance from the statutory boards, SPRING, IES, capital market players and clients for our abilities and services as a financial advisory firm.

    As a Singaporean financial advisory firm, Arka Projects has pioneered a presence in the Asian Development Bank and the World Bank's consulting markets for financial advisory work.

    In September 2005, IES has launched a Chinese edition of "Financing Internationalization" targeted at the China market. Advertisement is strictly by invitation only. Arka Projects has been invited to carry an advertisement in the publication, which advertises Arka Projects' capability for commercial paper issuance for private Chinese enterprises in partnership with an international broker.

    Given the Singaporean brand for quality and class, Arka Projects is a financial advisory firm serious in delivery for customers as we are well aware that our success depends on our clients' success and our partners' success.

    As a firm, we have migrated from being a pure consulting entity to an entity capable of capital markets' transaction delivery for firms in Singapore and the region. We have progressed through our value add services for clients despite tough economic conditions since mid 1997.

    To strengthen our competitiveness we enter into alliances with large reputable firms in Singapore and the region to provide ourselves with access to deal flow, intellectual capital and local knowledge of key Asian markets.

    Our differentiation is that we function as a value-add consultant and transaction treasury manager, in addition to providing a feasible alternative to the traditional intermediary role.

    Our value-add expertise, insights and business network cannot be duplicated as each investment thesis has its own different investment merits/ demerits, requiring creative and unique solutions as opposed to standard processes and procedures.


  2. What is the firm's role for capital market transactions and who are the firm's target customers?

    We undertake deal sourcing, due diligence and transaction coordination duties with the various professional parties and business owner/management to ensure delivery during the execution cycle. This fills the need for an intermediation role for an important but under serviced market segment in any economy: the middle market segment, which for various situational reasons is currently unable to access traditional financing sources.

    The nature of a capital markets advisory assignment undertaken by us is driven by the need of a business owner /management of a viable business with strong business fundamentals requiring corporate finance to fund ongoing business operations or growth opportunities.

    The need for financing arises because of lack of access to bank debt or equity financing due to tight monetary and credit conditions or other macro economic considerations beyond the business owners control.

    Companies with strong business fundamentals will be companies with proven management operating in markets that have allowed the companies in the past and will continue allowing the company to continue growing in the future or if the company has demonstrated abilities to migrate to new but related markets through existing business competencies to enhance profit margins. These un-rated companies need capital to generate cash flow. If the company has collateral to cover loan principal and our analysis shows that the client’s business model allows for loan principal and interest repayment, a case for commercial paper issue exists. Commercial paper is an alternative to bank borrowings and selling equity as crucial funds to survive and grow is introduced to the company.

    In addition to our role as consultants in the past, partnership with an international broker allows us to offer business owners, transaction distribution capabilities in the form of buyers for un-rated commercial paper/bonds offering a timely product for business owners in China. We expect to complete a US$20 million fund raising assignment for a Chinese company by end 2005.

    Larger consulting assignments requiring legal accounting, distribution input for transactions of US$15 million and above funding quantum are done through internationally recognized partners, including accounting, legal and transaction distribution. We take the coordination role and act as liaison point between the client and various professional parties.

    For smaller transactions below S$10 million, we have the expertise to prepare the information memorandum required for access to a network of institutional investors to ensure compliance with securities laws.

    This alternative approach allows us to bring very cost effective investment banking services to middle market business owners who would otherwise would be put off by high front end exploratory costs for exploring capital market alternatives or ignored by larger investment banks.


  3. Who are your partners and investors?

    Arka Projects' investors for commercial paper issue and pre-IPO private equity are private institutional investors and high net worth individuals to ensure compliance with securities laws. Arka Projects has a distribution partner, an international broker with offices in New York, London, Tokyo, Hong Kong and Singapore for large commercial paper issues.

    Our value-add expertise, insights and business network cannot be duplicated as each investment thesis has its own different investment merits/ demerits, requiring creative and unique solutions as opposed to standard processes and procedures. However as a business, it is prudent to disclose our unique, proprietary advisory approaches and working partners only to bona fide clients.

    Arka Projects has built a network to IPO management houses, underwriting houses and private institutional investors and high net worth individuals for capital market propositions as defined by prevailing securities laws.

    As a bona fide Singaporean advisory firm, Arka Projects does not disclose information about its partners and investors. Our progress as measured by the increasing scope of our advisory services and consulting assignments, which speaks for itself.


  4. How is Arka Projects different from other financial advisory firms?

    Arka Projects enhances the interest of business owners through value add consulting during the due diligence process in addition to the traditional financial intermediation role played by investment banks and brokerages.

    For business owners, an initial hurdle is upfront costs and subsequent transaction costs for traditional investment banking transactions; eg large upfront payments for the various professional parties for IPO transactions and agency fees for bond issues. At Arka Projects we align our interest with the business client's owner/management for the financial intermediation role. We function as transaction treasury manager to maximize returns and minimize costs for the financing exercise.

    Our role as financial advisor will see us undertake the role as a value add consultant and transaction treasury manager for business clients to build sustainable growth platforms through maximizing returns and minimizing costs through value add advisory work.


  5. Who benefits from Arka Projects' advisory activities?

    From our work in the SPRING consulting market, many business owners have benefited from our sound financial advice. Correspondingly the jobs of their employees have been preserved during the prolonged economic recession from 1997 to 2004. In the World Bank market, the poor who are targeted beneficiaries of the World Bank's country loans benefit from our advice regarding lending reach to the poor via on-lending channels.

    In the commercial paper market we are targeting, the private sector middle market business owners will benefit from crucial funding sources from the alternatives we provide. The business owners and employees of the borrowing enterprises will benefit from our advisory work for a corporate finance platform to support ongoing business operations and growth.

    For private equity and the pre-IPO market, business owners will benefit from our cost effective IPO consulting approach towards assessment of the viability of their IPO plans.

    If we are successful in supporting business owners' financing requirements for growing sound businesses, tens of thousands of everyday middle class people will benefit from the success of these business owners' business activities, both as employees and as consumers enjoying the products and services of these businesses we hope to support as financial adviser.


The Private Equity And Un-Rated Commercial Paper Industry

  1. What is private equity?

    Private equity is a form of investing in which private equity companies invest in private companies and real estate. Occasionally private equity firms make investments in public companies, which are called PIPEs or private investment in public equities.


  2. Who can invest in commercial paper for an Arka Projects origination deal?

    Arka Projects has signed an agreement to originate un-rated commercial paper for distribution by an international broker to the international broker’s database of institutional investors. This is to address demand for investment in good quality companies able to generate cash flows to service principal and interest obligations in growing economies. The demand for our services is driven by tight monetary conditions in high growth countries such as China where fundamentally sound businesses are caught by ongoing economic restructuring initiatives launched.

    These middle market business owners need cash to support business operations and growth plans. Largely, these middle market firms un-rated companies which are not serviced by the investment banks but are of a certain size, and have good operating prospects. These companies are the target market for un-rated commercial paper issuance. Arka Projects plays the role of financial adviser to these companies to structure the offerings. The international broker will place out the commercial papers/bonds based on structuring considerations including IPO potential, frequency of repayment, willingness of the business owners to pledge cash flows and offer potential commercial papers/bonds investors ownership in the borrowing enterprise at a point in future, credit enhancement measures adopted and the value of the collateral offered.

    Because of applicable securities laws, firms such as Arka Projects and its distribution partner for commercial paper and pre-IPO investment work only with "accredited investors" and "qualified high net worth customers" as these terms are defined under existing securities laws. These types of investors are highly sophisticated investors with considerable financial resources, such as high net worth individuals and institutional investors.

    Arka Projects and its distribution partner is prohibited from offering its products to the general public under applicable securities law regulations.


  3. What is the average size of an Arka Projects origination deal for commercial paper?

    Normally, an average size will range from US$10 million onwards. We currently have a deal from China: a customer on hand for a five-year US$20 million commercial paper issue to be secured on a shopping mall.


  4. What is a leveraged buyout?

    Management-led buy-outs are the purchase of companies in cooperation with the current management. A combination of equity and debt is used for the typical transaction. The equity mostly comes from various funds and other “co-investors” and the debt typically comes from major banks.


  5. What is venture capital?

    Venture capital is money that is invested in companies to help them get started or to grow. Investments range in the US$2 million to US $20 million range and are sometimes coupled with funding from other venture capital firms. Normally venture capital firms specialize in different business segments e.g. Technology, manufacturing and business services companies.


  6. What is mezzanine financing?

    Mezzanine is the level of securities that resides between common equity and senior debt and includes preferred stock and senior subordinated debt. Mezzanine investments have high-risk adjusted returns with significant current income. Mezzanine financing includes un-rated commercial paper with a convertibility element allowing for conversion of debt to equity at a point in the future on terms agreed upon in the present between the borrower and investor.


  7. Why are the returns in private equity typically higher than the public markets?

    In the world of investing, rates of returns correlate well with rates of risk: the greater the risk, the greater the return; the lower the risk, the lower the return. Private equity investments and un-rated commercial paper are among the most risky investments. The ability of the deal originator to supplement traditional credit analysis and credit analysis with local business insights is crucial to informed decision making by institutional investors and high net worth individuals. Retail investors are advised not to invest directly in these instruments, as they will normally not have the knowledge or skills for investing in this market. Prevailing securities regulations around the world protect the retail investor from direct investment in these markets.