Reorganisations and Demergers
In our ever-changing economic climate and the challenges in ensuring transparency, accountability, good governance and compliance, there is a need to review complex group structure to ensure to ensure business efficiency and improve profitability. Other reasons for reorganisations include tax planning, or as a precursor to an acquisition or a sale.
Our approach is to ensure that our client’s successful transformation process is simple and efficiently managed. Our specialist employment, real estate and banking teams will work together with the Corporate Team to provide a combined expertise for a seamless solution.
Our specific areas of focus include:
Group reorganisations
Intra-group transfers, including hive-ups, hive-downs
Demerger
Capital reduction
Share for share exchange
Restructuring agreement to include merger, acquisition (including debt sale), swaps, divestment, management buy-out (MBO), management buy-in (MBI)
What We Do
At MKB Law our multidisciplinary teams, led by a partner, will work closely with the clients to understand their businesses, management strategies, stakeholders involved and most importantly their challenges. We work collaboratively to provide a strategic and seamless solution to achieve the best possible outcome for our clients.
What capital reduction and how does it work?
A demerger by way of capital reduction involves the holding company reducing its capital by transferring the assets as a dividend in specie to a new holding company that in turn issues shares to the shareholders and the shares related to those assets are then cancelled. A reduction of capital can be utilised where the holding company does not have sufficient distributable reserves, or does not wish to reduce the amount of distributable reserves, or has substantial non-trading activities, or it is anticipated that one of the demerged business will be acquired by a third party.
