Restructuring & Transactions

Transactions change who owns and controls a company. The corporate approvals, the documents signed and the filings made afterwards decide whether the transaction does what the parties intended, and whether it stands up to later scrutiny.

Where this arises

• Mergers, demergers and other reorganisations of a business or group.
• Transfers of shares, and entry or exit of promoters and investors.
• Buy-backs, reduction of capital and other changes to the capital structure.
• Raising capital through a rights issue, preferential allotment or private placement.
• Shareholders’ agreements, joint ventures and other transaction documents.

What the work involves

Planning the transaction and the sequence of approvals; choosing the correct mode of issue or transfer; obtaining the required valuation; drafting and reviewing the agreements, including governance rights, restrictions on transfer, deadlock and exit; amending the articles of association so that they match the agreement; and completing the filings that follow, including the return of allotment within the prescribed period.

Points that are often missed

• Provisions that affect the transfer of shares or control of the board are generally given effect through the articles of association as well, because that is the document that binds the company.
• A private placement has procedural requirements of its own, including offer letters, a record of the persons offered shares, and receipt of money through banking channels.
• Stamp duty rules differ from state to state, and an unstamped document can be difficult to rely upon.
• Post-closing obligations, such as reporting and valuations, often continue long after the money has changed hands.