Shares sale and purchase: What to do with guarantee?

Linkedin Post

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 by the target company after completion of the sale and purchase, the buyer will not want to risk to be solely liable if the guarantee is being called upon.

Similarly, the seller will normally expect release of any guarantees which the seller (or where the seller is a corporate seller, any other company in the seller’s group) has given in respect of the target company.

Typically, release of guarantee will be a post completion matter in the sale and purchase agreement.

#malaysiancorporatelawyer
#mergersandacquisitions

This post was first posted on Linkedin on 1 February 2021.

Linkedin Post
Five key steps for legal due diligence

Most lawyers are good at identifying issues, but legal due diligence shouldn’t be limited to merely reviewing documents and identifying issues. Here are my five steps for conducting legal due diligence: 1. Identify the issues based on the scope of legal due diligence as agreed with the clients. 2. Provide recommendations …

Linkedin Post
Begin with the end in mind: Post-completion integration

I once worked on an M&A deal that took more than a year to complete. While the deal was not inherently complex, it dragged on due to delays in finalizing the details of the transaction agreements for reason beyond my control. As the deal involved a larger corporation acquiring a …

Lawyering
Being a Corporate Lawyer: Why I Do What I Do

After years of demanding schedule and juggling simultaneous corporate exercises which take a toll on physical and mental health, it is not surprising that some corporate lawyers experience burnout. Unlike some legal practice areas, the work of a corporate lawyer may not seem immediately impactful or “make a difference” to …