A recurrent topic and concern, as of late, within the authorized
and monetary advisory to firms in Macau SAR, is that of addressing the
necessities imposed by Part 206 of the Business Code for when the
firm’s internet asset worth (NAV) drops beneath half the worth of its capital.

Other than the ‘conventional’ options of capital
discount/improve, quasi capital, asset revaluation and measures of the same
nature, it’s value noting that the issuance of perpetual bonds, while
remaining one of many least used options, could within the circumstances, show to
be a wonderful different.

Perpetual bonds are thought of an fairness instrument whose
issuance contributes positively for the NAV of the corporate, as unequivocally
demonstrated in paragraphs 16(a), 16(b) and AG13 of Worldwide Accounting
Commonplace 32 (relevant within the Macau SAR ex
vi the Administrative Regulation of the Chief Government No. 42/2020);

From the angle of the fairness holders, the benefit could
be appreciable, given its (at the very least theoretical) non-diluting impact on
shareholders who is probably not keen or capable of subscribe for the injection of
new funds, while providing assured remunerations prospect for the
subscribing fairness holders.

The issuance of perpetual bonds could also be enacted by the means
of a public subscription or a non-public placement. Within the first case, the
process have to be accomplished by a neighborhood underwriting company in accordance with the
Decree-law No. 32/93/M and the Round No. 009/B/2019-DSB/AMCM of the Financial
Authority of Macao, with the ultimate approval of the Chief Government. Non-public
placements are merely topic to compliance with the related provisions within the
Business Code, and could also be terribly advantageous as a part of an total
financing restructuring for personal corporations.

João Nuno Riquito

Managing accomplice, Riquito Advogados

Belmiro Leong

Trainee lawyer, Riquito Advogados

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