Igor Mazepa: Concorde Capital establishes a $50m fund to support businesses under stress21 May 2020
Igor Mazepa, an investment banker, CEO and founder of Concorde Capital investment company, announced a new $50m fund established for hybrid financing of stressed companies. He made this statement in his interview for Interfax-Ukraine.
“Amid the coronavirus crisis, Concorde Capital is set to act as a financial advisor to help Ukrainian businesses facing difficulties with access to capital raise and structure hybrid financing. We have made a $50m fund for this bridge financing”, announced Igor Mazepa.
“Despite the crisis, there are rather well-to-do Ukrainians who previously invested in real estate and received rental income. As the real estate market has sunk and the deposit rates in commercial banks have collapsed, many instruments have become inoperative, even if they worked a couple of months ago. For these people, it is important to continue investing,” Igor Mazepa answered to a question about the sources of the fund.
Many investment companies have seen their traditional operations (such as IPOs, Eurobonds, and others) go down to zero merely overnight with the coronavirus crisis outbreak.
“What do we have in this situation? Among other things, we have a necessity to provide access to capital for companies. Today, many companies find it difficult to raise financing from traditional sources (bank loans and private equity funds) because of a high debt burden or current market conditions.
With the conservative assessment of cash flows by banks, companies cannot count on loans. Raising money from private equity funds is no longer profitable for borrowers because of low valuation of their business. In this regard, hybrid instruments for capital raising become more and more popular. They include convertible loans, mezzanine financing, profit participating loans, and others. Typically, hybrid instruments are combinations of debt and equity/profit participation. They are quite often used at various stages of company development and are particularly useful when the business is under stress, as is the case now”, commented Igor Mazepa for Interfax-Ukraine news agency.