Structuring of an equity investment of significant volume


The assignment was accompanied by the challenge to legally protect the mutual interests of the parties, including the target company, former shareholders and the new shareholder. The matter was important not only because of the substantial amount of investment and its impact on the firm’s business development, but also because of the diversity of interests that were taken into account while structuring the transaction. Following the agreement on the structure of equity investment with the parties we worked on the General Frame Agreement, two loan agreements, replacement in debt agreement (one of the current shareholders practically will leave the company after the completion of funds transfer), redrafted the Articles of Associations of the company with view to envisage the respective protection clauses for the current shareholders, i.e. majorities’ rights, tag-along and drag-along rights, pre-emption rights. A serious insight was given to the tax implications of the investment and in fact the most efficient from tax point of view scenario was picked as a means of realization.

It matters to note that the new scope of business to be undertaken by the company is rather new in Bulgaria – in addition to chicken meat production, trade and export; the new investment shall feed a brand new production line for ducks and duck meat production.

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