What salient terms to disclose?

Equity capital markets (ECM)

When a public listed company or its subsidiary enters into a contract in respect of a transaction which requires the approval of the shareholders of the PLC, the circular must include salient terms of the contract.

Some considerations in determining which terms of the contract to be disclosed as salient terms in the circular include:

1. Whether disclosure of the terms is required under the Listing Requirements.

e.g. for an acquisition or disposal which meets the threshold, the Listing Requirements require the circular to set out the date, parties, general nature, consideration and mode of consideration of material contracts outside ordinary course of business entered into by the following within 2 years immediately preceding the date of the circular:

• the corporation to be acquired or disposed of; and

• the corporation whose shares or convertible securities are to be issued as consideration for the disposal by the PLC.

2. Whether the shareholders/ investors ought to know the terms to make an informed decision on whether to approve the transaction.

3. Whether the terms are unusual or onerous for a transaction of the same nature.

4. Whether the terms have financial impact on the PLC or the relevant subsidiary.

#malaysiancorporatelawyer

This post was first posted on Linkedin on 4 March 2021.

Image by mohamed Hassan from Pixabay

Company Law
Legal Requirements for Allotment of Shares in Malaysia

M&A transactions often involve allotment of shares in a company. Understanding the legal requirements for allotment of shares is essential to ensure compliance and avoid potential disputes over the validity of allotment of shares. The following are the key steps for allotment of shares under the Companies Act 2016 (CA) …

Due Diligence
The Mind That Never Rests

What does a corporate transactional lawyer do while waiting in the lift, at a restaurant counter or for coffee at a café? I read the licenses on display, check their validity periods, and scan for conditions. When I see certificates on the walls, I can’t help but examine them too. …

Lawyering
Learning to Appreciate the Small Things

One afternoon, I walked into the office, feeling unsettled after a discussion with another adviser. As I took my laptop from my bag and placed it on my desk, something caught my eye-a small handmade paper box, stapled at the sides, neatly holding some binder clips. The day before, I …