Buy-Out as a form of Corporate Restructuring in Nigeria
Section 449 (a) and (b) of the Security and Exchange Commission’s Rules provide for the Rules on Management Buy-Out.
Section 449 (a) provides that a management buy-out is an acquisition by a management team of a company, of controlling shares of that company or its subsidiaries with or without third-party financing.
Simply explained, a management buy-out is a transaction in which the management team of a firm buys the assets and operations of the company they run.
(b) According to the SEC Rules, an application for the approval of a management buy-out shall be filed by the management team making the acquisition, such application shall be accompanied by the following;
(a)Resolution of the shareholders of the company approving the management buy-out
(b)Resolution of the management team to undertake the management buy-out
(c)A copy of the certificate of incorporation of the company
(d)A copy of the memorandum and articles of association of the company
(e)Two copies of the prospectus which shall contain; the profile of the company, profile of the management team buying over the company amongst other requirements
(f)Sale agreement between the company and the management team which shall contain terms such as the terms and conditions of sale amongst others
(g)Any other document that may be required by the commission from time to time
We trust that this short piece has informed your understanding of buy-out as a form of corporate restructuring in Nigeria.
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