Document background
The Convertible Debt Agreement is a crucial financing instrument in the Malaysian business landscape, particularly utilized by growth companies and startups seeking flexible funding options. This document is employed when a company wishes to raise capital without immediately setting a firm valuation, typically during bridge financing rounds or when traditional equity investment may be premature. The agreement comprehensively covers the debt instrument's terms, including principal amount, interest rate, maturity date, conversion triggers, and price mechanisms, while ensuring compliance with Malaysian regulatory requirements including the Companies Act 2016 and securities regulations. It provides investors with the security of debt with the upside potential of equity, while giving companies the flexibility to defer valuation discussions and maintain current control structures until a future funding round or milestone.
