BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
nificant stakes in local power plants. On the other hand, Chinese investors have continued leading investments in the energy sector. • Start-ups – local start-ups continued impress - ing cross-border investors. ADB Venture invested in Tiger New Energy in expanding its country-wide battery swapping stations. Digital start-ups such as Loop Freight, Pathao and Paperfly have raised significant FDI from venture capital and angel investors. • Manufacturing – there has been increasing trend in acquisition of manufacturing plants in Bangladesh led by foreign investors acquiring significant stakes in manufacturing entities such as garments, accessories, footwear and yarn. Japan Tobacco acquired Akij business for USD1.47 billion. There has also been extended activities in chemical and cement manufacturing sectors. • Technology ‒ there has been a surge in the acquisition of licensed telecoms operators especially in the area of gateway operators. In addition to renewed interest in datacentres, a number of deals are in the pipeline and several demergers of datacentres for potential joint collaboration initiatives with cross-border players are also under consideration. 2. Overview of Regulatory Field 2.1 Acquiring a Company Acquisition of Shares An acquisition of shares can take place either by purchasing existing equity in the target from another shareholder or by subscribing to fresh equity in a company. For publicly listed companies, the placement of shares by fresh issue (known as PIPE – private investment in public equity) is subject to regu -
latory approval. Nonetheless, shares issued to existing shareholders may also be bought either: • through the stock exchange at market price; • through the stock exchange at a negotiated price; or • out of the stock exchange for non-cash con - siderations. Merger (Amalgamation) The target (amalgamating) merges into the acquiring (amalgamated) entity following a court order and the target is then dissolved. All assets and liabilities of the target are vested in the acquiring entity. The consideration is set - tled either in cash or by share swap. However, to be qualified as an amalgamation within the meaning of tax laws, the shareholders holding not less than 75% in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the merger by, or by a nominee for, the amalgamated company or its subsidiary) need to become shareholders of the amalgamated This structure is adopted to avoid the tax inef - ficiencies of an itemised sale of assets. The tar - get’s undertaking or division is demerged from the target under a court order and then trans - ferred to the buyer. Asset/Liability Transfer (Itemised Sale of Assets and Liabilities) company. Demerger Specific assets and liabilities are sold under a sale and purchase agreement with an itemised list of assets and liabilities to be transferred. Asset Transfer (Sale as a Going Concern) All assets and liabilities of an entity or a busi - ness division or plant are sold as a going con -
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