Document background
The Compulsory Convertible Debentures Agreement is a sophisticated financial instrument used in the Malaysian market when companies seek to raise capital through debt that automatically converts to equity. This document type is particularly relevant for growing companies that need immediate funding but want to defer equity dilution, or for investors who seek the security of debt with guaranteed equity participation. The agreement must comply with Malaysian regulatory requirements, including the Companies Act 2016 and Capital Markets and Services Act 2007. It typically includes detailed provisions on conversion mechanics, valuation methods, investor rights, and company obligations. This document is commonly used in growth financing, pre-IPO funding rounds, or strategic investments where the conversion terms are predetermined and mandatory.
