Axiom Energy Initial Public Offering

Transcription

1 Axiom Energy Initial Public Offering Axiom Energy made corporate history when it successfully raised $37.6 million, only to return funds days before its ASX listing. PRIA Golden Target Awards Entry Category 8: Investor Relations, including Merger Acquisition Communications Prepared by Burson-Marsteller July 2006

2 TABLE OF CONTENTS TABLE OF CONTENTS... 2 EXECUTIVE SUMMARY... 4 SITUATION ANALYSIS... 5 PHASE ONE: IPO...5 PHASE TWO: STOP ORDER...6 GOALS AND OBJECTIVES... 7 PHASE 1 IPO...7 PHASE 2 STOP ORDER...7 RESEARCH... 8 PHASE 1 IPO...8 PHASE 2 STOP ORDER...8 TARGET PUBLICS... 8 PHASE ONE IPO...8 PRIMARY:...8 SECONDARY:...8 INFLUENCERS:...9 PHASE TWO STOP ORDER...9 PRIMARY:...9 SECONDARY:...9 INFLUENCERS:...9 2

3 COMMUNICATIONS STRATEGY... 9 PHASE 1 - IPO...9 PHASE 2 STOP ORDER...9 IMPLEMENTATION PHASE 1 IPO PHASE 2 STOP ORDER BUDGET RESULTS PHASE 1 IPO PHASE 2 STOP ORDER EVALUATION PHASE 1 IPO PHASE 2 STOP ORDER SUMMARY

4 Executive Summary Axiom Energy (AE) made corporate history when it successfully raised $37.6 million, only to return funds days before Australian Stock Exchange (ASX) listing. Established 2005, Axiom Energy was driving two types of alternative fuel: biodiesel produced from plant oils and animal fats and fuel derived from waste plastics that would otherwise end up as landfill. Burson-Marsteller (B-M) was engaged initially to profile Axiom Energy in the emerging biofuels sector and help the positioning of its Initial Public Offering (IPO). Axiom Energy s entry into Australia s fuel market was timely as the sector was already abuzz with talk of alternative fuels, despite confusion on types. Media relations formed the main platform of the communications strategy. B-M leveraged the company s plastics to fuel project to drive media interest outside the traditional outlets and used a series of background briefings to broaden understanding of Australia s growing portfolio of biofuels. Axiom Energy closed its share offer early following oversubscription of shares, but a change in Federal Government fiscal arrangements saw the company return funds to share applicants days before it was due to list on the ASX. The communications strategy was adapted to provide immediate investor confidence on refund of funds, safeguarding Axiom Energy s reputation. 4

5 Situation Analysis PHASE ONE: IPO Six months short of its foundation, Axiom Energy was pursuing an IPO to fund the first of its two alternative fuel projects. The company was raising $37.6 million with expected uptake between institutional and individual investors and on listing a market value of $82.7 million. The purpose of the funds was to help establish two of its flagship products namely: Biodiesel produced from renewable plant oils, animal fats and used cooking oils Diesel derived from waste plastics The entry of Axiom Energy s biodiesel products to the Australian landscape was well timed in light of a growing local diesel fuel market, rising crude oil prices and increasing demand for environmentally sound alternative fuel products. In addition, Australian Government incentives provided a strong impetus for the growth of biofuels. Biodiesel and other renewable fuels received a grant, which offsets the 38c per litre excise duty until 2011, and from thereon a progressive increase to 19.1c per litre by The company s waste plastics to fuel project enjoyed tax-free status by virtue of an Australian Tax Office (ATO) Private ruling based on the pre 2006 Excise Tarriff Act. The challenge for the company was to identify the barriers that prevented its smooth entry and identify strategies that would provide highest resonance with all of its target audiences. The communications challenge was not only to create a profile for a little known entity but also to facilitate acceptance of a new form of biofuel- namely biodiesel - in a market place more familiar with another ethanol made from sugar cane. The latter s heightened profile was the result of a favourable hearing from the Federal Government led by the Prime Minister. In addition, the company had to leverage its business partnerships with already established Australian icons in order to counteract the company s lack of profile. 5

6 PHASE TWO: STOP ORDER Following the successful launch of the IPO and its early, oversubscribed closure, ASIC intervened, issuing a stop order preventing the sale or trade in Axiom Energy securities. The stop order was issued following advice ASIC had received from the Federal Treasury stating that it was to conduct a review of the Excise Tariff Act which will result in the imposition of excise to all forms of diesel, immaterial of its source. This made Axiom Energy s diesel derived from waste plastics project commercially unviable and rendered the prospectus - and therefore the IPO - invalid. The communications strategy was adapted to provide immediate investor assurance that all funds will be refunded while highlighting key factors for the withdrawal. A full-scale government lobbying campaign ensued, coupled with intensive media and investor relations activities designed to maintain confidence in the company. Government relations activities were undertaken at a state and federal level. Direct government lobbying has led to the Federal Department of Environment reviewing a submission from Axiom Energy with support of its business partners Visy and Ozmotech - on the social, economic and environmental benefits of the company s waste plastic to diesel project. In addition, Axiom Energy has progressed its plans with a show of support by founding investors and plans to establish its first plant in Geelong and a proposed listing in the second half of

7 Goals and Objectives PHASE 1 IPO Business Result Drive sale of 47 million shares raising $37.6 million with uptake between institutions and individual investors. Communications Outcomes Ensure >60% of coverage highlights: Axiom Energy product profile Clearly differentiate biodiesel from ethanol made from sugarcane Share offer specifics Secure media stories to coincide with institutional road show PHASE 2 STOP ORDER Business Result Continued confidence of Axiom Energy s business proposition by founding investors and business partners. Communications Outcomes Ensure >75% coverage highlights: Stop order linked to Government intervention. 7

8 Research PHASE 1 IPO Media coverage and government policy insights helped frame strategy. Biofuel was an emerging energy source and recognised as a great alternative to traditional fossil fuels. Biofuels referred largely to ethanol and minimal mention of biodiesel. Exaggerated focus on ethanol with Government politicians brandishing ethanol in all references to biofuels. Expected Prime Minister led announcement on Australia s biofuels target. A Force Field Analysis was conducted to identify the key strengths, weaknesses, opportunities and threats faced by the company (Appendix A). PHASE 2 STOP ORDER Real time research conducted in phase two. Investor interviews on stop order. Media monitoring behind the scenes and published articles. Target Publics PHASE ONE IPO PRIMARY: Recognised institutional investors. Environmentally conscious individual investors. SECONDARY: Federal and State Governments. Biofuels sector. 8

9 INFLUENCERS: Mainstream business/finance media; specialist automotive, environmental and agriculture related media. PHASE TWO STOP ORDER PRIMARY: Share applicants Founding investors Federal Government SECONDARY: Other key players in the biofuels sector. INFLUENCERS: Mainstream business/finance media; environment media, political writers Communications Strategy PHASE 1 - IPO Based on emerging trends of Australia s relatively new biofuels sector, the campaign strategy was designed to create a profile for Axiom Energy, positioning it as one of Australia s largest biofuels producers and the Australian pioneer of diesel derived from waste plastics. While the waste plastics to diesel project comprised 14% of Axiom Energy s production in FY2007, it was clear the groundbreaking technology would provide the news hook to secure broad media coverage beyond traditional business/finance media. The communications strategy was based on leveraging the waste plastics to fuel story as well as Axiom Energy s partnerships with prominent Australian companies such as Visy. PHASE 2 STOP ORDER Following ASIC s intervention, it became essential to protect Axiom Energy s profile and that of its senior management. Campaign strategy was refined to primarily assure investors of the immediate return of funds via immediate and direct communications, facilitate ready access to business and finance media keen to understand the real factors and convey the company s plans to seek a review of proposed Government policy to revisit its offer to investors in

10 Implementation PHASE 1 IPO Preparation June July 2006 B-M held an initial workshop with Axiom Energy s senior executive team to identify perceptual issues and operational gaps as well as key drivers that can be developed into favorable positioning for the company. Using a Force Field Analysis (FFA) tool (Appendix A), B-M developed the communications strategy to support the share offer. On completion of Axiom Energy s core positioning statements (See Key Message House, Appendix A) a range of workshops were conducted which included: o o Institutional road show presentation refinement Key message rehearsal (Appendix A) and media training Preparation of a Rapid Response Kit to provide standardized responses for key spokespeople for issues the company may be questioned on by key stakeholders. B-M worked extensively with a specialised corporate publications design house and Axiom Energy in the production of the company s prospectus (Appendix A), particularly in developing an overview module to: o o o o Simplify the particulars of the share offer Articulate the company s call to action Highlight the investment proposition Provide an international and local context of the emerging biofuels market Pre-IPO early August Strategic placement of a story in the Australian Financial Review to coincide with one of the key institutional road show presentations. The placement required a sensitive approach because of limitations set out by the Corporations Act which prevents a company from actively promoting its offer without an approved prospectus in place. Monitoring of institutional road shows and channeling developments to select media highlighting share uptake by reputable institutions. 10

11 IPO launch mid August to end September Provide support for the launch of Axiom Energy s website and assisted in making an online prospectus available for direct investor access. Promote waste plastics to fuel story as hook to broaden mainstream media interest beyond traditional outlets. Leverage Axiom Energy s influential partnerships to support endorsement of the company eg Visy. Create VNR providing visuals of the type of plastics that would be recycled, supported by interesting news bites to leverage interest from TV outlets of the obscure topic of fuel made from waste plastics that would otherwise end up as landfill (Appendix A; supporting Audio Visual materials VNR and resulting coverage) Continued media feedback of IPO progress: early closure and oversubscription. PHASE 2 STOP ORDER Issues Management early October Media and issues management to address stop order by facilitating regular media access to senior executives to communicate investor assurances message: funds will be returned and Axiom Energy will pursue its case with the Federal Government and return to market with revised offer. Assign CFO to address all investor calls. Undertake direct investor correspondence on refund assurances. Government Relations October 05 to April 06 Draft submission to Federal Government outlining the merits of the waste plastic to fuel project. Direct communications with the Prime Minister, Treasurer and Environment Minister and face-to-face interaction with relevant departmental heads to plead case that the nonexcisable status of diesel made from waste plastic is critical for the ongoing financial viability of the project and essential for creating greater alternative fuel options for Australia. Canvass support of Victorian Government, as Axiom Energy s project was the first Victorian-based biofuel enterprise with State Treasurer appealing to his Federal counterpart. Draft terms for an independent report to Government on the economic, environmental and social merits of the waste plastics to fuel project. Manage media interest where there was inclination to attack government on its decision so as not to antagonize decision makers. 11

12 Budget For budget details, please refer to Appendix D. Results Media relations was the only form of regular communications during phase one with exception of institutional and broker road show and 12 standard house advertisements placed by the underwriter. Overall, Axiom Energy received 109 hits reaching an audience of 10 million+ by virtue of readership. PHASE 1 IPO Coverage Print 28. Newswire / on-line 32. Radio 4. Television 2 Business Result 100% fully subscribed with near 50 % split between institutional and individual investors. PHASE 2 STOP ORDER Coverage Print 33. Newswire / on-line 10. Television 1 Business Result Investment to enable Axiom Energy to fund new biodiesel plant in Victoria and IPO in mid Approaches by companies seeking joint ventures. 12

13 Review and recommendations of Axiom Energy s submission by Environment Department currently before Federal Minister for decision. Evaluation PHASE 1 IPO Communications Objectives 80 % differentiated Axiom Energy and its product profile. 80 % referenced the share offer. Secured media placement to coincide with every capital city institutional briefing. PHASE 2 STOP ORDER Communications Outcomes >75% coverage highlighted: Stop order linked to Government intervention. SUMMARY The Axiom Energy communications campaign was tremendously successful. Importantly, Axiom Energy s desired business result of achieving the sale of 47 million shares raising $37.6 million with uptake between institutions and individual investors was met with the offer closing early and oversubscribed. The scale and quality of media coverage gained by Axiom Energy in phase one was unprecedented for a new venture with no notable figureheads. Phase two communications strategy which evolved into issues and crisis management provided a satisfactory outcome for Axiom Energy providing its share applicants immediate assurance of a refund and importantly upheld the company s external reputation, which enabled the continued confidence of its founding investors. The success of communications activities surrounding ASIC issuing a stop order was evaluated via the communications outcomes attained and the business result achieved on behalf of Axiom Energy. TOTAL WORD COUNT: 2,198 (without headings) 13