{"id":57674,"date":"2026-07-07T11:02:04","date_gmt":"2026-07-07T11:02:04","guid":{"rendered":"https:\/\/my.legal500.com\/developments\/?post_type=legal_developments&#038;p=57674"},"modified":"2026-07-07T11:02:04","modified_gmt":"2026-07-07T11:02:04","slug":"alternative-fundraising-options-for-thai-private-limited-companies-debentures-and-convertible-debentures","status":"publish","type":"legal_developments","link":"https:\/\/my.legal500.com\/developments\/thought-leadership\/alternative-fundraising-options-for-thai-private-limited-companies-debentures-and-convertible-debentures\/","title":{"rendered":"Alternative Fundraising Options for Thai Private Limited Companies:  Debentures and Convertible Debentures"},"content":{"rendered":"<p><strong>While conventional loan arrangements are commonly used where financing is obtained from a limited number of lenders, debentures and convertible debentures may provide an alternative means of raising capital from multiple investors under a single issuance and offer a more flexible investment structure for both issuers and investors.<\/strong><!--more--><\/p>\n<p>Although Section 1229 of the Thai Civil and Commercial Code generally prohibits private limited companies from issuing debentures, Section 37 of the Securities and Exchange Act B.E. 2535 (1992) (as amended) (the \u201c<strong>Securities Act<\/strong>\u201d) provides that such restriction shall not apply to private limited companies that obtained approval to issue debentures under the Securities Act.<\/p>\n<p>A private placement to institutional investors, ultra-high-net-worth investors (\u201c<strong>UHNW investors<\/strong>\u201d), high-net-worth investors (\u201c<strong>HNW investors<\/strong>\u201d), or other investors, is a fundraising method commonly adopted by private limited companies (the \u201c<strong>Issuers<\/strong>\u201d). This is because the Issuers may obtain approval on a general basis and are exempt from the requirement to file a registration statement and\/or prospectus (the \u201c<strong>Filing<\/strong>\u201d) with the Securities and Exchanges Commission of Thailand (the \u201c<strong>SEC<\/strong>\u201d).<\/p>\n<p><strong><em>Institutional Investors<\/em><\/strong><em> include, among others, financial institutions, securities companies, insurance companies, investment funds, angel investors, venture capital companies, and persons having a relationship with the company in the manner prescribed by applicable regulations, as well as any other persons designated by the SEC Office.<\/em><\/p>\n<p><strong>Debentures<\/strong><\/p>\n<p>Under Notification of the Capital Market Supervisory Board No. TorJor. 16\/2565 Re: <em>Application for and Approval of the Offering for Sale of Newly Issued Debt Instruments through a Private Placement and the offering of Convertible Debentures to Persons with Specific Characteristics<\/em> (as amended) and Notification of the Securities and Exchange Commission No. GorJor. 30\/2565 Re: <em>Exemption from the Requirement to File a Registration Statement for the Offering of Debt Securities<\/em> (as amended), in offering debentures, the Issuers may consider conducting the offering under the PP10 regime in order to benefit from general approval and an exemption from the requirement to file the Filing with the SEC.<\/p>\n<p>Under the PP10 regime, debentures may be offered to (i) <u>institutional investors<\/u>, provided that the number of offerees does not exceed 10 within any 4-month period, or (ii) <u>UHNW investors<\/u> and\/or <u>HNW investors<\/u>, provided that the number of offerees does not exceed 10 and the aggregate offering value does not exceed THB 50 million at any time, subject to key requirements as follows:<\/p>\n<p><u>General Qualifications for Issuers<\/u><\/p>\n<ul>\n<li>Has not offered any type of debt securities in violation of the offering requirements, during the<br \/>\n2-year period preceding the date of filing the transfer restriction with the SEC Office, unless a waiver has been granted by the SEC Office;<\/li>\n<li>Has registered the transfer restrictions with the SEC Office; and<\/li>\n<li>Has submitted the draft terms and conditions of the debentures, the draft debenture holders&#8217; representative appointment agreement (if any), and details of the intended use of proceeds from the offering to the SEC Office.<\/li>\n<\/ul>\n<p><u>General Qualifications for Debentures<\/u><\/p>\n<ul>\n<li>Not contain provisions allowing the Issuers to defer or cancel interest or other payments, effect a write-down or write-off of the debentures, or implement a waterfall payment structure; and<\/li>\n<li>Bears either a fixed interest rate or a floating interest rate linked to a financial institution&#8217;s interest rate or another reference rate, or be issued as zero-coupon bonds.<\/li>\n<\/ul>\n<p><u>Offering Method and Offering Period<\/u><\/p>\n<p>The Issuers must conduct the offering on a private placement basis, meaning that the offering must not be advertised to the public and the offering documents must be distributed only to persons falling within the relevant category of investors or within the applicable numerical limits prescribed for the relevant offering type.<\/p>\n<p>While a PP10 offering is not subject to any prescribed offering period, the Issuers should nonetheless consider conducting the offering within a reasonable timeframe to ensure that the information provided to investors remains current.<\/p>\n<p><u>Post-Offering Obligations<\/u><\/p>\n<p>The Issuers must use the proceeds from the offering in accordance with the purposes notified to the SEC Office. The issuers are also required to report to the SEC Office any early redemption of the debentures, the use of proceeds from the offering, and the results of the offering.<\/p>\n<p><strong>Convertible Debenture<\/strong><\/p>\n<p>In addition to conventional debentures, a private limited company may consider issuing convertible debentures, which grant investors the right to convert the debentures into shares of the Issuers. Convertible debentures combine both debt and equity features and may align the interests of the Issuers and investors by allowing investors to participate in the future growth and potential increase in the value of the Issuer\u2019s shares.<\/p>\n<p>Under Capital Market Supervisory Board Notification TorJor. 25\/2565 Re: <em>Private Placement Offerings of Newly Issued Securities by Limited Companies<\/em> (as amended) and Notification GorJor. 32\/2565<br \/>\nRe: <em>Exemption from Filing a Registration Statement for Convertible Debentures Issued by Limited Companies<\/em>, the scope of the exemptions available to private placement offerings of convertible debentures is broader than that applicable to offerings of conventional debentures, as the Issuers may offer convertible debentures to institutional investors without being subject to the 10-offeree limitation and may also make offerings under the PP10 regime to a broader range of eligible investors beyond UHNW investors and HNW investors, as summarized below:<\/p>\n<table>\n<thead>\n<tr>\n<td rowspan=\"2\" width=\"162\"><strong>Instruments<\/strong><\/td>\n<td colspan=\"3\" width=\"462\"><strong>Type of investors<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"150\"><strong>Institutional investors<\/strong><\/td>\n<td width=\"156\"><strong>UHNW investors<\/strong><strong> \/<br \/>\nHNW investors<\/strong><\/td>\n<td width=\"156\"><strong>Other investors<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"162\"><strong>Debentures<\/strong><\/td>\n<td width=\"150\"><strong>PP10 &#8211; <\/strong>Offerees \u2264 10<br \/>\nwithin any<br \/>\n4-month period<\/td>\n<td width=\"156\"><strong>PP10 &#8211;<\/strong> Offerees \u2264 10<br \/>\nand Offering value<br \/>\n\u2264 THB 50 million<\/td>\n<td width=\"156\">\u00d7<\/td>\n<\/tr>\n<tr>\n<td width=\"162\"><strong>Convertible Debentures<\/strong><\/td>\n<td width=\"150\">No limit<\/td>\n<td colspan=\"2\" width=\"312\"><strong>PP10 &#8211;<\/strong> Offerees \u2264 10<br \/>\nand Offering value \u2264 THB 50 million<sup>\/1<\/sup><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong><em><u>Remark:<\/u><\/em><\/strong><em> \u00a0\u00a0\u00a0\u00a0 <sup>\/1<\/sup> Offering convertible debentures on PP10 basis is not available to a small enterprise, determined by the number of employees and annual revenue.<\/em><\/p>\n<p>In offering convertible debentures on a private placement basis, the Issuers must comply with the general requirements applicable to private placement offerings, as discussed above in relation to debenture offerings. In addition, given that convertible debentures carry conversion rights into shares, the Issuer must obtain a shareholders&#8217; resolution approving the issuance of a sufficient number of shares to accommodate the exercise of such conversion rights and register such resolution with the Department of Business Development (\u201c<strong>DBD<\/strong>\u201d).<\/p>\n<p>Upon completion of the offering of the convertible debentures, the company must submit a report on the results of the offering to the SEC Office. If any investors exercise their conversion rights, the company must also report the resulting issuance of shares to the SEC Office and register the corresponding capital increase with the DBD.<\/p>\n<p>Whether an Issuer should raise funds through conventional debentures or convertible debentures will ultimately depend on the commercial objectives of both the Issuer and the investors, the intended investor base, and the specific circumstances of the proposed offering. A careful assessment of the available structures and the applicable regulatory requirements is therefore essential before undertaking any fundraising exercise.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-57674","legal_developments","type-legal_developments","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/legal_developments\/57674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/legal_developments"}],"about":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/types\/legal_developments"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/media?parent=57674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}