Leveraged buyout activity in the Asia-Pacific region is "in its infancy" compared with mature markets in Europe and the US, a Fitch Ratings report said yesterday.
The Asia-Pacific region "is a less homogeneous market, with each country in the region having its own distinct legal and regulatory framework," said Siew Huey Loong, a director in Fitch's corporate ratings group.
"Financing structures that address these issues efficiently and robustly will need to evolve over time," she said.
Among the issues faced in arranging leveraged buyouts are obtaining legal and regulatory approval for transactions and difficulties in servicing offshore debt from onshore assets, the London-based Fitch said.
Although the European leveraged buyout market had to cope with myriad legal, tax and regulatory considerations, it is a relatively mature market, Loong told reporters.
"Sophisticated financing structures have been developed to address these issues in recent years," she added.
on the rise
Leverage buyout activity in the Asia-Pacific region is on the rise, Fitch said.
The report mentioned significant growth in Australia and Taiwan.
Meanwhile China and India are being earmarked as potential growth markets.