Structuring and Financing Transactions

The sustainability and prosperity of a firm is not just about the operations of the underlying business but how the interests of owners, managers, staff and external stakeholders are aligned with each other. When these various rights and responsibilities are correctly structured, the firm becomes more attractive to all stakeholders. QED Solutions has extensive skill and experience in the development of documentation in this critical area.

The question of how to finance or fund a business is often a complex interplay between the finance available to a firm and the type of financing required by the firm. This involves dynamic processes informed by whether the firm has stable or predictable revenues, if it is growing quickly, and of course the tax impact of different types of financing.

A key element to get right in private companies is the relationship and interplay of shareholders. QED Solutions has extensive experience in the drafting of bespoke Memorandums of Incorporation (“MOI”) that best utilise the opportunities afforded by the alterable provisions in Companies Act of 2011. The MOI largely replaces the requirement for a stand-alone shareholders’ agreement which is only used to regulate those matters which shareholders wish to record amongst themselves but do not want to disclose to outside parties.

In addition to the general provisions of an MOI, the ability to issue different classes of shares provides external funders with options to fund a business using equity instruments, or by debt which converts to equity on agreed and tax compliant terms.

QED Solutions has extensive knowledge of the funding terms used by commercial banks, development funding institutions and private equity funds. These include provisions dealing with ranking of debt and security undertakings.

Significant savings in time, money and effort can be achieved if we are consulted at the point of negotiating initial term sheets well before long form funding agreements are circulated.

 

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