Best Acquisition / Leveraged Finance Lawyers in Lima

About Acquisition / Leveraged Finance Law in Lima, Peru

Acquisition and leveraged finance law in Lima, Peru refers to the legal framework that governs the financing of corporate acquisitions, including mergers, buyouts, takeovers, and other business combinations using borrowed funds. In this context, leveraged finance typically involves using a significant amount of debt, often secured against the assets of the company being acquired or the combined entity. The purpose is to amplify the potential return to equity investors, while also managing risk and regulatory considerations. Because Lima is the commercial and financial capital of Peru, most significant acquisition finance deals in the country involve local legal oversight and adhere to complex Peruvian regulations, blending local law with aspects of international finance standards.

Why You May Need a Lawyer

Engaging in acquisition or leveraged finance transactions can be highly complex and involve significant financial risk. You may need a lawyer in the following situations:

• When acquiring a company or business assets in Peru and requiring external funding
• If you intend to structure a leveraged buyout involving Peruvian entities or assets
• To negotiate and draft loan agreements, security documents, or intercreditor arrangements
• To ensure compliance with Peruvian banking, securities, and corporate laws
• If you encounter disputes between shareholders or lenders regarding the terms of financing
• To conduct due diligence on a target company or assist with regulatory approvals
• When you are a foreign investor and need to navigate Peru’s foreign investment regulations
• If you need advice on tax implications of leveraged transactions

Local Laws Overview

Acquisition and leveraged finance transactions in Lima, Peru are primarily governed by the Peruvian Civil Code, General Corporate Law, Securities Market Law, and banking regulations overseen by the Superintendencia de Banca, Seguros y AFP (SBS). Key aspects to consider include:

• Restrictions on granting financial assistance by Peruvian companies, particularly in leveraged buyouts
• Foreign exchange and repatriation rules impacting cross-border finance structures
• Requirements for registering security interests and collateral, including real estate, shares, and movable property
• Disclosure and approval obligations for significant corporate transactions, especially for companies listed on the Lima Stock Exchange
• Tax consequences of interest payments, withholding taxes, and thin capitalization rules
• Anti-money laundering (AML) and anti-corruption compliance measures
• Procedures for bankruptcy, insolvency, or restructuring, which may affect the enforcement of security or creditor rights

Frequently Asked Questions

What is leveraged finance and how is it used in Peru?

Leveraged finance refers to using borrowed funds (debt) to acquire a business or assets, typically amplifying investment returns but increasing risk. In Peru, leveraged finance is common in private equity transactions, restructurings, and larger corporate acquisitions.

Can Peruvian companies provide financial assistance for their own acquisition?

Peruvian law generally restricts companies from providing direct or indirect financial assistance (such as loans or guarantees) for the acquisition of their shares. This is designed to protect creditors and minority shareholders, but there are structuring solutions-your lawyer can help navigate these.

What kind of collateral can be used in acquisition finance transactions in Peru?

Common forms of collateral include real property, movable assets, shares, receivables, and bank accounts. Security interests must be properly documented and registered with relevant public registries to be enforceable.

Are there limitations for foreign lenders in Peruvian acquisition finance?

Foreign lenders can participate in Peruvian acquisition finance, but they must comply with local registration, currency controls, and tax requirements, including withholding tax on interest payments to foreign entities.

How are acquisition loans documented in Peru?

Acquisition loans are typically documented through loan agreements, promissory notes, and security documents. Documentation should comply with Peruvian law and ensure enforceability of rights and remedies in Peru.

Is regulatory approval needed for acquisition finance transactions?

Depending on the size, nature, and sector of the transaction, approvals may be required from the Competition Authority (INDECOPI), SBS, or other regulatory bodies, particularly for transactions in regulated industries.

What are the tax considerations for acquisition finance?

Key tax issues include the deductibility of interest, withholding tax on cross-border payments, and possible application of thin capitalization rules. Appropriate structuring is necessary to minimize tax risks.

How long does it take to complete an acquisition finance deal?

Timelines vary depending on transaction complexity, due diligence, financing arrangements, and required approvals. Simple deals may close in a few weeks, while complex or regulated deals can take several months.

What happens if the borrower defaults?

In the event of default, lenders may enforce their security interests, subject to Peruvian insolvency and foreclosure procedures. The process and ability to recover will depend on the quality and registration of collateral.

Should I use a Peruvian lawyer even if my company is foreign?

Yes, local legal expertise is essential to navigate Peru’s regulations, mitigate risks, and ensure that all documentation and registrations are valid and enforceable under Peruvian law.

Additional Resources

If you need further information or support, the following resources and organizations may be helpful:

• Superintendencia de Banca, Seguros y AFP (SBS) - Peru’s main financial regulator overseeing banking and financial services
• INDECOPI - National Institute for the Defense of Competition and the Protection of Intellectual Property, for competition and antitrust matters
• Peruvian Ministry of Economy and Finance
• Lima Stock Exchange (Bolsa de Valores de Lima)
• Peru Bar Association or Lima Bar Association, for referral to qualified legal professionals
• Local chambers of commerce and business associations that provide regulatory and business guidance

Next Steps

If you are considering an acquisition or leveraged finance transaction in Lima, your next steps should include:

• Contact a reputable law firm in Lima with proven expertise in acquisition and leveraged finance
• Prepare all relevant corporate and financial documents for an initial legal review
• Consult with finance, tax, and accounting advisors to assess the transaction’s feasibility and compliance
• Discuss the intended structure and objectives transparently with your lawyer to tailor advice
• Remain informed about local regulatory developments that may impact your transaction
• Negotiate and clearly document all agreements with the help of your legal team

Legal advice is a critical investment in ensuring that your acquisition or leveraged finance deal is successful and compliant with all applicable laws in Lima, Peru.