Melhores Advogados de Aquisição / Financiamento Alavancado em Funchal

1. About Aquisição / Financiamento Alavancado Law in Funchal, Portugal

Aquisição / Financiamento Alavancado, commonly known as leveraged buyout financing, involves acquiring a company using a substantial amount of borrowed money. In Funchal and the Madeira region, this practice follows the same national framework as the rest of Portugal, but with local considerations for corporate governance, labor, tax, and regulatory approvals.

In practice, leveraged acquisitions typically use a mix of senior debt, subordinated or mezzanine debt, and equity raised by the buyer. A special purpose vehicle (SPV) may be created to hold the target company and the financing package. The lender’s security package often includes mortgages on assets, pledges over shares, and personal or corporate guarantees. Given Madeira’s economy and business environment, due diligence often focuses on tourism, real estate, and service sector risks that are common in the region.

Because these transactions involve complex contracts, cross-border considerations, and potential regulatory oversight, engaging a lawyer with expertise in corporate finance and M&A in Funchal is essential. An attorney can help structure the deal, draft and negotiate term sheets and credit agreements, and ensure compliance with Portuguese law and local requirements.

Key concepts to understand early include the roles of SPVs, debt seniority, covenants, security interests, and minority protections for shareholders. For up-to-date guidance, consult official sources and a qualified Madeira-based attorney who can tailor advice to your situation.

Important context for residents and businesses in Madeira can be found in national regulatory frameworks and in local administrative practices. See authoritative sources for the exact texts of the governing laws and any recent changes: Diário da República (Official Gazette), Banco de Portugal, and the Portal do Governo.

2. Why You May Need a Lawyer

• Structuring a Madeira-based LBO with local lenders - You plan a buyout of a Madeira SME and need to balance senior debt, mezzanine funding, and equity while aligning with local banking practices and covenants.
• Negotiating a complex security package - The deal requires mortgages on real estate, pledges over shares, and guarantees from related entities, all of which must be perfected and enforceable under Portuguese law.
• Managing cross-border financing - If the target has international investors or offshore SPVs, you will need to address cross-border tax, transfer pricing, and regulatory compliance in Portugal.
• Ensuring regulatory compliance and disclosures - Transactions may trigger disclosure requirements, corporate governance standards, and labor law considerations relevant to Madeira and Portugal.
• Tax planning and structuring - A lawyer can identify tax-efficient structures for acquisitions, including potential benefits or obligations at the Madeiran and national levels.
• Handling due diligence and risk assessment - A qualified lawyer coordinates due diligence on contracts, real estate, employment, and potential liabilities to avoid post-closing disputes.

These scenarios emphasize the need for local expertise in Funchal, where real estate, tourism-related industries, and small to mid-sized enterprises often form the core of leveraged transactions. An attorney can also liaise with local registries and authorities to expedite approvals and registrations.

3. Local Laws Overview

In Portugal, leveraged acquisitions operate under a framework of national laws governing corporate acts, banking, and insolvency. The following are commonly relevant in Funchal and Madeira for Aquisição / Financiamento Alavancado matters.

• Código das Sociedades Comerciais (Commercial Companies Code) - Governs corporate governance, mergers, acquisitions, and protections for shareholders, including minority protections in shareholder transactions. This code is published in the official gazette and is regularly amended to reflect EU and domestic developments. See the official source for the current consolidated text: dre.pt.
• Regime Jurídico do Crédito e das Instituições de Crédito e Sociedades Financeiras - Establishes the framework for licensing, supervision, and activities of credit institutions and financial entities that provide leverage financing for acquisitions. This regime is implemented and overseen by the Banco de Portugal and is updated to align with EU banking standards. See Banco de Portugal for supervisory guidance: bportugal.pt.
• Lei de Insolvência e Recuperação de Empresas - Provides the rules for insolvency proceedings and corporate restructurings that may arise if leveraged transactions encounter financial distress. Texts and updates can be found through the Diário da República and official government portals: dre.pt.

Recent changes in this space typically focus on improving efficiency of cross-border M&A, updating corporate governance rules, and harmonizing local procedures with EU standards. For the exact and current texts, consult the official gazette and national authorities. See examples of official resources below.

"Commercial Companies Code is the core legal framework governing corporate acts including acquisitions and protections for shareholders, with ongoing amendments available in the Diário da República."

Official sources for law texts and updates include:

• Diário da República (Official Journal of Portugal) - where the current consolidated texts of the Commercial Companies Code and related regulations are published.
• Banco de Portugal - provides supervisory guidance for lenders and credit institutions involved in leveraged financing.
• Portal do Governo - official government information on business registrations, compliance, and regulatory updates.

4. Frequently Asked Questions

What is leveraged acquisition financing in simple terms?

Leverage financing uses borrowed money to fund an acquisition, with the expectation that future cash flows will cover debt service. The buyer contributes equity and uses lenders to finance the remainder through a senior debt and often mezzanine layers.

How do I know if a Madeira target is suitable for an LBO?

Assess the target’s stable cash flows, EBITDA, and ability to generate debt service coverage. Consider sector risks in Madeira, including tourism stability and real estate exposure, before structuring the deal.

When should I hire a local Madeira lawyer for an LBO?

Engage a Madeira-based corporate finance lawyer early in the process, ideally before signing term sheets, to draft or review credit agreements and security docs and to manage regulatory steps.

Where can I find reliable information about the governing laws for LBOs?

Consult the official Diário da República for current texts and amendments, and Banco de Portugal for supervisory guidelines affecting lenders and debt instruments.

Why might I need to structure an SPV in an LBO?

An SPV isolates the acquisition and financing risks, simplifying liability, tax planning, and creditor relations. It also helps align the deal with lender requirements and regulatory expectations.

Can a cross-border investor participate in an LBO in Madeira?

Yes, but you must address cross-border tax and regulatory issues, and coordinate with Portuguese counsel to handle local registrations and reporting obligations.

Should I expect extra compliance steps for Madeira-based acquisitions?

Yes, local employment, land use, and real estate regulations may require additional steps and notices to local authorities in Madeira, alongside national requirements.

Do I need to disclose all liabilities and guarantees to lenders?

Full disclosure is typically required in due diligence and credit applications. Inaccurate or incomplete disclosures can undermine financing and trigger liability concerns.

How long does due diligence usually take for an LBO in Portugal?

Due diligence commonly runs 4 to 8 weeks depending on target complexity and the number of jurisdictions involved. Complex cross-border deals may take longer.

What is the difference between senior debt and mezzanine debt?

Senior debt has priority in repayment and lower risk; mezzanine debt is higher risk and more expensive but can offer equity-like upside and flexible terms.

Is there a typical timeline from term sheet to closing in Madeira?

Typical timelines span 6 to 14 weeks, depending on due diligence findings, negotiation depth, and regulatory approvals. Small to mid-sized deals move faster than large cross-border transactions.

5. Additional Resources

These official resources can help you understand the regulatory landscape and where to find authoritative texts:

• Diário da República (Official Gazette) - Primary source for current texts of laws and regulations. https://dre.pt
• Banco de Portugal - Supervises credit institutions and provides guidance on leveraged financing, debt instruments, and risk management. https://www.bportugal.pt
• Portal do Governo - Official portal with information on business registrations, licensing, and regulatory updates relevant to Madeira. https://portugal.gov.pt

6. Next Steps

1. Define the strategic objective - Clarify target company, financing mix, and desired governance outcomes before engaging counsel. Set a realistic timeline.
2. Assemble the documentary pack - Gather financial statements, contracts, real estate deeds, employment agreements, and tax filings relevant to the Madeira target.
3. Identify a Madeira-based corporate finance lawyer - Look for experience in LBOs, M&A, and local regulatory matters in Madeira. Use the Ordem dos Advogados directory or trusted referrals.
4. Request preliminary consultations - Meet with at least 2-3 lawyers to discuss structure, risk, and cost estimates for due diligence and negotiation.
5. Draft the term sheet and initial structure - Have your lawyer outline the proposed debt stack, equity contributions, SPV usage, and security package.
6. Review and negotiate credit documents - Allow your lawyer to lead negotiations on loan agreements, guarantees, covenants, and close cooperation with lenders.
7. Execute due diligence and regulatory checks - Complete financial, legal, environmental, and labor due diligence with your counsel and the client’s team.