Separation of businesses – Restructure, Shareholder Matters, Tax Advice
Circumstances / Situation
Two businesses had grown over time in the one holding company structure with each business eventually needing to move to their own board and operational structure. Being in the one group meant both companies could not easily raise capital to achieve their strategic goals. Many advisers had unsuccessfully attempted to assist with the transaction over a five-year period. The internal people and shareholder issues were also complex with over a decade of legacy issues.
Solution
We were able to provide practical options to the board which would enable the businesses to demerge into their own operating structures. These tax issues included demerge relief, scrip for scrip rollover and commercial debt forgiveness. Despite the complexity of the different boards and stakeholder interests, we were able to resolve all issues over time to everyone’s satisfaction.
Outcome
Both businesses now sit in their own operational structure and all inter-connected issues have been resolved. One of the businesses has now raised significant capital and grown into the US market.
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