BAHAMAS Trends and Developments Contributed by: Castino Sands, Lennox Paton
the parts stated in the plan of demerger or jointly in common in equal parts if not stated in the plan of demerger without such property and rights being deemed distributed or otherwise made available to the respective shareholders of the demerged companies; • unless otherwise provided in the plan of demerger, the value of the property, rights, assets and liabili - ties vested in the demerged company or to which the demerged company is entitled shall have the same values assigned to such property, rights, assets and liabilities immediately prior to the demerger and the demerger shall not affect the val - ue of the capital contribution made by the share - holder or the value of the shares in the demerged companies; • unless otherwise provided in the plan of demerger, the shares of the demerging company shall convert into shares of the demerged companies in the pro - portions specified in the plan of demerger and such conversion shall not be deemed a redemption, transfer or reissuance of shares in the demerging company or the demerged companies; • the demerged companies become jointly and severally subject to all financial penalties which the demerging company was subject to immediately before the demerger was completed, unless there is an order of the court to the contrary; • the demerged companies become subject to all civil liabilities and all contracts, debts and other obligations which the demerging company was subject to immediately before the demerger was completed in the parts stated in the plan of demerger or jointly and severally if not stated in the plan of demerger; and • all actions and other legal proceedings which, immediately before the demerger was completed, were pending by or against the demerging com - pany may be continued by or against all or any of the demerged companies unless there is an order of the court to the contrary. In the context of M&A transactions, the demerger procedure may be employed to spin-off or separate business lines that are the target of acquisition and following completion of the demerger process, such assets may be sold off while the primary business of the group continues unaffected by the transaction.
The demerger process has the potential to simplify and streamline M&A transactions to the extent that the target business is owned by a Bahamian IBC or the IBC otherwise features in the ownership structure of the target group. The Electricity Act, 2024 The Electricity Act, 2024, though relevant to a specific sector, is nevertheless worth mentioning in the context of Bahamian M&A transactions. The Electricity Act, 2024, has been the catalyst driving recent M&A activ - ity in the energy sector in The Bahamas. The govern - ment of The Bahamas, in its “The Bahamas National Energy Policy 2025-2030”, has touted its intention to modernise the generation, transmission and distribu - tion of electricity in The Bahamas. The primary objec - tive of the government here is to lower costs, build a more resilient, reliable and modernised energy gen - eration, transmission and distribution infrastructure in the country and generally promote the development of sustainable energy options. The objective of the new Electricity Act, as per the government’s energy policy, is to establish a legis - lative framework to regulate the generation, trans - mission, distribution and supply of electricity and to establish a regime for the supply of safe, least-cost, reliable and environmentally sustainable electricity throughout The Bahamas. As a result of the Electricity Act and the legal and regulatory regime thereunder, the state-owned utility company, The Bahamas Power and Light Company Limited, has sold the entire electricity transmission and distribution grid on the island of New Providence. The purchaser of the transmission and distribution infrastructure on the island of New Providence was a special-purpose vehicle, Bahamas Grid Company Ltd. established under Bahamian law for the sole purpose of acquiring, upgrading, managing and maintaining the grid. The modernisation of the energy sector in The Baha - mas is expected to be the catalyst for additional M&A activity in the short to medium term, as the govern - ment of The Bahamas has recently signed a memo - randum of understanding for the acquisition of the Grand Bahama Power Company Limited.
90 CHAMBERS.COM
Powered by FlippingBook