A hotel investment is rarely a simple matter of sending monies in exchange for shares. When a large global travel company decides to invest in a new market, it’s board of directors need to know that their monies are being spent with supporting legal advice on due diligence, regulatory compliance, contract negotiations, refinancing and banking documentation, and then completion.
In order to ensure the deal structure works, corporate preparations must be instigated. There will often be in such deals multiple advisers – international tax advisers, local advisers and accountants, overseas in-house counsel and then perhaps a broker or commercial agent. All have their own points of view on ‘structuring’ a transaction depending on their objectives and past experience.
In Thailand, foreigners many not at first understand the restrictions in relation to the Foreign Business Act, the method by which shares are issued and the fact that there cannot be ‘unissued but authorized’ shares in a Thai private limited company. All shares must be issued once they come into existence.
Further, what is acceptable in a set of articles of association and how those articles interact with a joint venture agreement will not be the same as in a foreign jurisdiction.
With all of these ingredients in the mix, Hughes Krupica assisted it’s client with a comprehensive timetable for the investment transaction and prepared the counterparty to ensure that they were ready to legally comply with corporate procedures to receive an investment. The Thai bank also required managing as often banks will not have regard to the security requirements of an investor and will only approach a deal trying to preserve its own security and minimize its own risks.
Hughes Krupica managed to work well within the team of advisers to coordinate the staged injections of monies to pay off part of a bank loan, secure new terms, increase the share capital of the company and reorganize the shareholdings, create a new management platform for decision making through board and shareholder procedures and to complete the deal taking into account the position of the seller which would remain a co-shareholder with the investors.
Throughout such a process, advisers must keep a steady hand and remain calm, but be firm where necessary on certain procedures and ‘must-do’ legalities. This is how Hughes Krupica adds value to corporate deals.
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