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ARTICLE · 01 DECEMBER 2008

Financing A Share Purchase - Is It That Simple

Prospective investors wishing to buy the assets of a company lock, stock and barrel could buy all of the shares from the seller and there would, ordinarily, be no difficulty in arranging such a transaction.

South AfricaFinance and Banking
Stephen Kennedy-Good
Stephen Kennedy-Good

Prospective investors wishing to buy the assets of a company lock, stock and barrel could buy all of the shares from the seller and there would, ordinarily, be no difficulty in arranging such a transaction. The assets of the company are valued by the owner of the shares and the purchaser, and the shares are bought for the valuation arrived at. The purchaser who can pay cash for the shares simply pays the purchase price and the shares are transferred which avoids any expenses of having immovable property registered in the name of the company transferred to the purchaser. But, what if the purchaser does not have cash on hand to finance the purchase, which is more often the case. Would it be possible, for example, to secure payment of the purchase price by passing a bond over the assets of the company or to look to the company for some other form of finance?

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