Shareholders’ agreement for minority shareholders
Today’s post is about provisions in shareholders’ agreement for the benefit of minority shareholders. It is common to have a shareholders’ agreement when an M&A transaction results in more than one shareholder in the target company. Some provisions to include in a shareholders’ agreement for the benefit of a minority …
Representations and warranties in M&A transactions
Today’s post is about representations and warranties given by sellers in M&A transactions (“Seller’s Warranties”). Not all Seller’s Warranties are of equal importance. Breach of different Seller’s Warranties, may affect the sale and purchase transaction in varying degree, depending on which Seller’s Warranty is breached. It may be worthwhile to …
Disclosure letter in M&A transactions
Today’s post is about disclosure letter in M&A transactions. A disclosure letter is an important document in an M&A transaction, but it probably does not receive as much attention from the parties involved as the sale and purchase agreement (SPA). A disclosure letter is a document from a seller to a buyer which sets out exceptions to the representations and warranties …
MSWG corporate governance assessment 2020
Out of the 851 Malaysian public-listed companies (PLCs) assessed by the Minority Shareholders Watch Group (MSWG) in its corporate governance assessment in 2020: • 220 PLCs have no female board representation (25.9%) • 370 PLCs have at least one woman director (43.5%) • 142 PLCs have at least 30% women on their …
Terms of preference shares
Some of the key terms of preference shares to consider include: 1. Number of preference shares to be issued 2. Issuance price 3. Dividend -Rate of dividend -Whether dividend is cumulative -Time for dividend payment 4. Tenure of preference shares Whether the preference shares will be converted to ordinary shares …
Why do companies issue preference shares?
Some companies prefer to raise funds by issuing preference shares instead of issuing ordinary shares or getting loans for the following reasons: 1. Issuance of preference shares allows the companies to raise funds without affecting the voting powers of the existing ordinary shareholders. Unlike ordinary shares, preference shares carry limited …
Arbitration clause in agreements
For anyone looking to include arbitration clause in agreements for arbitration in Malaysia, you may want to consider adopting the following model arbitration clause under the AIAC Arbitration Rules 2021: “𝘈𝘯𝘺 𝘥𝘪𝘴𝘱𝘶𝘵𝘦, 𝘤𝘰𝘯𝘵𝘳𝘰𝘷𝘦𝘳𝘴𝘺, 𝘥𝘪𝘧𝘧𝘦𝘳𝘦𝘯𝘤𝘦 𝘰𝘳 𝘤𝘭𝘢𝘪𝘮 𝘢𝘳𝘪𝘴𝘪𝘯𝘨 𝘰𝘶𝘵 𝘰𝘧 𝘰𝘳 𝘳𝘦𝘭𝘢𝘵𝘪𝘯𝘨 𝘵𝘰 𝘵𝘩𝘪𝘴 𝘤𝘰𝘯𝘵𝘳𝘢𝘤𝘵, 𝘪𝘯𝘤𝘭𝘶𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦, 𝘣𝘳𝘦𝘢𝘤𝘩, 𝘵𝘦𝘳𝘮𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘰𝘳 …
Verification process in ECM corporate exercise
One of the earliest lessons I have learned as an equity capital markets lawyer is this: Submission documents must not contain any statement or information which is false or misleading or from which there is a material omission. Being provided with information at the eleventh hour just before a prospectus or circular …
Why use a term sheet for M&A transaction?
A party wants to acquire the assets owned by another party. The other party is willing to sell its assets. It should be a straight forward offer and acceptance, right? Unfortunately, not in this case. The potential seller wants to sell the shares of the company which owns the assets …
Searches
Prior to entering into business ventures with another party, it is important for a business owner to carry out due diligence on the counterparty and the target business or company. There are various searches which could be carried out as preliminary steps to check whether there is any red flag. …