In partial disposals, it’s common for sellers and buyers to agree that any existing guarantees given by the sellers to secure banking facilities of the target companies will be adjusted to reflect the post-completion shareholding.

For public listed companies (PLCs) in Malaysia, this can affect the deal timeline if not addressed properly at an early stage.

Under the Bursa Malaysia Listing Requirements, a PLC’s guarantee to secure banking facilities of its subsidiaries constitutes financial assistance.

Issues may arise where:

•     a PLC disposes of its shareholding partially in a subsidiary; and

•      the subsidiary becomes an associated company or a joint arrangement post-completion.

In such cases, continuing guarantees may trigger additional requirements under the 𝘔𝘢𝘪𝘯 𝘔𝘢𝘳𝘬𝘦𝘵 𝘓𝘪𝘴𝘵𝘪𝘯𝘨 𝘙𝘦𝘲𝘶𝘪𝘳𝘦𝘮𝘦𝘯𝘵𝘴 (𝘱𝘢𝘳𝘢𝘨𝘳𝘢𝘱𝘩 8.23) or 𝘈𝘊𝘌 𝘔𝘢𝘳𝘬𝘦𝘵 𝘓𝘪𝘴𝘵𝘪𝘯𝘨 𝘙𝘦𝘲𝘶𝘪𝘳𝘦𝘮𝘦𝘯𝘵𝘴 (𝘙𝘶𝘭𝘦 8.25), including where:

•      financial assistance is provided to an associated company or joint arrangement, and

•      the aggregate amount provided or to be provided at any time to each associated company or joint arrangement is 5% or more of the group’s net tangible assets.

In such instance, the PLC is required to issue a circular to shareholders and obtain shareholder approval in a general meeting.

There are limited exceptions where the financial assistance is provided in the ordinary course of business.

I have seen this point attract regulatory attention in practice, which is why it’s important to address it early in the deal.

#MalaysianCorporateLawyer

This post was first posted on LinkedIn on 25 January 2026.