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Debt To Equity Conversion Agreement

Debt To Equity Conversion Agreement Template for Malaysia

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Key Requirements PROMPT example:

Debt To Equity Conversion Agreement

"I need a Debt to Equity Conversion Agreement for my Malaysian technology company to convert a RM 5 million bank loan into equity shares, with the conversion scheduled for March 2025 and including specific provisions for anti-dilution protection."

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Document background
The Debt to Equity Conversion Agreement is a crucial instrument in corporate restructuring under Malaysian law, commonly used when companies seek to improve their balance sheet structure or resolve financial distress. This document becomes relevant when a company wants to reduce its debt burden by offering creditors equity ownership in exchange for cancelling existing debt obligations. It must comply with Malaysian regulatory requirements, including those under the Companies Act 2016 and Capital Markets and Services Act 2007. The agreement typically includes detailed provisions on conversion mechanics, share valuation, regulatory approvals, and post-conversion rights, making it essential for both debt restructuring and corporate recapitalization scenarios.
Suggested Sections

1. Parties: Identification of the Debtor Company and the Creditor(s)

2. Background: Recitals describing the existing debt arrangement and intention to convert to equity

3. Definitions and Interpretation: Definitions of key terms and interpretation rules used throughout the agreement

4. Debt Acknowledgment: Confirmation of the outstanding debt amount and its validity

5. Conversion Terms: Details of the conversion mechanism, including conversion price, number of shares, and timing

6. Conditions Precedent: Conditions that must be satisfied before the conversion can take place

7. Completion Mechanics: Step-by-step process for executing the conversion

8. Representations and Warranties: Statements of fact and assurances from both parties

9. Regulatory Compliance: Compliance with relevant laws and regulations

10. Tax Matters: Treatment of tax implications and responsibilities

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process for formal communications between parties

13. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

14. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

Optional Sections

1. Security Release: Required when existing debt is secured and security needs to be released

2. Multiple Creditor Provisions: Required when multiple creditors are converting debt to equity

3. Shareholder Rights: Include when specific shareholder rights are being granted as part of the conversion

4. Anti-dilution Protection: Include when creditor requires protection against future share dilution

5. Board Representation: Include when creditor is to receive board representation rights

6. Lock-up Provisions: Include when restrictions on share transfers are required post-conversion

7. Future Financing Provisions: Include when arrangements for future financing needs to be addressed

Suggested Schedules

1. Existing Debt Details: Schedule listing all debt instruments being converted, including amounts and dates

2. Share Capital Structure: Details of the company's share capital before and after conversion

3. Conversion Calculations: Detailed calculations showing conversion ratio and resulting shareholding

4. Completion Checklist: List of all documents and actions required for completion

5. Form of Board Resolutions: Template board resolutions approving the conversion

6. Form of Shareholder Resolutions: Template shareholder resolutions approving the conversion

7. Regulatory Filings: List and copies of required regulatory filings

8. New Share Certificate Format: Template for new share certificates to be issued

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions






























Clauses


























Relevant Industries

Financial Services

Manufacturing

Real Estate

Construction

Technology

Retail

Energy

Healthcare

Telecommunications

Mining

Agriculture

Transportation and Logistics

Relevant Teams

Legal

Finance

Corporate Secretarial

Treasury

Risk Management

Compliance

Corporate Development

Board Secretariat

Tax

Relevant Roles

Chief Financial Officer

Finance Director

Corporate Lawyer

Legal Counsel

Company Secretary

Investment Banker

Restructuring Advisor

Chief Executive Officer

Financial Controller

Treasury Manager

Risk Manager

Corporate Finance Manager

Compliance Officer

Board Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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