For any business embarking on a funded acquisition or other corporate transactions, there are two closely connected considerations: what the business wants to achieve, and how its existing or proposed funding arrangements affect its ability to do it.
It can be tempting to treat the corporate and banking elements as separate workstreams. In practice, decisions made in one can have significant implications for the other.
Bringing the two together at an early stage can help identify potential issues sooner, control costs and reduce the risk of delays as completion approaches.
When a routine corporate decision has banking implications
Sometimes the issues involved can appear relatively straightforward. In one corporate exercise, the parties intended to amend a company’s articles of association. It was only relatively late in the process that the existing finance documents were identified as restricting changes to the company’s constitutional documents without the lender’s consent.
