Client Overview
A group holding a bank-financed asset through a subsidiary special purpose vehicle in Malaysia.
Engagement Scope
Company secretarial planning, documentation and regulatory coordination for the sale of a financed asset through a preference share redemption and allotment.
Challenge
- The group had decided to exit the market by selling an asset encumbered under existing bank financing.
- The exit was to be carried out by redeeming the existing redeemable preference shares and issuing a fresh second tranche of preference shares in the name of the buyer.
- Execution of the documents had to be timed to tie in with approval from the Companies Commission of Malaysia (SSM). Any delay to that approval would have breached the conditions precedent for the exercise.
- That created counterparty risk: the risk of the buyer triggering the conditions precedent.
Our Approach
Role
- Acted as company secretary for the exercise.
Planning and timing
- Planned the sequence of document execution against the expected regulatory approval and the conditions precedent.
Corporate documentation
- Prepared and checked the full documentation set, from circular notices to circular resolutions and special resolutions.
Funds readiness
- Coordinated account preparation for receipt of the funds.
Regulatory coordination
- Coordinated with SSM, keeping the urgency of the exercise clear, to secure timely approval of the lodgement.
Deliverables
- Circular notices.
- Circular resolutions.
- Special resolutions.
- Account preparation for receipt of funds.
- Lodgement with SSM, approved on time.
- Full redemption of the existing redeemable preference shares.
- Allotment of a second tranche of preference shares in the name of the buyer.
Outcome
- SSM approved the lodgement on time.
- The redeemable preference shares were fully redeemed, and a fresh second tranche was issued in the name of the buyer.
- The seller exited ownership of the asset completely.
Capabilities Demonstrated
- Share capital corporate actions: allotment and redemption of redeemable preference shares.
- Company secretarial services, including notices and circular and special resolutions.
- Transaction timing and conditions precedent management.
- Regulatory coordination for time-critical lodgements.
- Exit and divestment support for financed assets.
Agencies and Stakeholders
- Companies Commission of Malaysia (SSM) (lodgement approval)
- Financing bank
- Buyer (counterparty)
- Seller
Time-critical share redemption and allotment, approved on time, giving the seller a clean exit from a bank-financed asset.