M&A: Does the buyer have financial standing to replace guarantee?
In a sale and purchase of shares, a seller should consider the likelihood the buyer is acceptable to financial institutions as a guarantor to replace the seller, if the target company’s borrowings are secured by substantial guarantees. It is common for the buyer to provide an undertaking in the sale …
Build awareness through Google Alerts
If you are overwhelmed with your daily to-do list but want to stay on top of the topics or areas which are of interest to you, you may want to consider creating Google Alerts. Key in “Google Alerts” in the Google search bar. The steps to create Google Alerts are …
Constitution: Lodgement Requirements
My previous posts touched on the need to have a shareholders’ agreement customised to meet the shareholders’ specific requirements and for the company to have a constitution with terms consistent with the shareholders’ agreement. What’s next after the above are done? The company must lodge the constitution with the Registrar …
Do companies need constitution?
Following yesterday’s post, the next step after execution of a shareholders’ agreement is to amend the constitution of the company (if there is one) to be consistent with the shareholders’ agreement. A company without a constitution should consider adopting one which is consistent with the shareholders’ agreement. Save for a …
Shareholders agreement: Google is not your best friend
A shareholders’ agreement reflects the dynamics of the shareholders’ relationship. A shareholders’ agreement typically sets out clauses relating to appointment of directors, quorum required for a shareholders’ or board meeting to be valid, procedures for directors or shareholders to decide on matters relating to the company, whether there are any …
Exclusivity period
Parties in M&A transactions may sometimes enter into heads of agreement to set out the key terms and conditions on how they intend the transactions to proceed, prior to the negotiation and execution of sale and purchase agreements. The buyer should request the heads of agreement to include an exclusivity …
It is not just about the money
The consideration for any sale and purchase of shares or business is likely to be one of the most important matters to be agreed between the seller and buyer. However, it should not be-all and end-all. The seller and buyer may need to do certain acts or obtain third parties’ …
Shares sale and purchase: What to do with guarantee?
In a sale and purchase of shares, the buyer will typically require any guarantee given by the target company for the benefit of any company in the seller’s group to be released. If the guarantee has been given for the benefit of a company which will not be wholly owned …
Pre-IPO restructuring: Declaration of director’s interest
Prior to an IPO, it is common for promoters of IPO to restructure the assets, business or corporate structure of the group of companies undertaking the IPO i.e. the listing group. The promoters are usually the owners of the assets and business as well as the shareholders and directors of …
Company to prepare for IPO
The following are some of the steps a company preparing for an initial public offering (“IPO“) needs to take: Get banks’ consent if there is any declaration of dividend prior to the IPO by the borrower company which is part of the listing group and there is covenant to obtain …