Bangladeshi banks can participate in some acquisition financing, but Bangladesh Bank rules restrict lending for the purchase of shares and lending secured by shares, and count such exposures towards capital market limits. Single borrower and large exposure limits, as well as related party rules, also apply. As a result, local bank acquisition finance is often limited or structured around asset-based or working capital facilities to the target after closing. We review the proposed facility against current Bangladesh Bank requirements and help lenders and borrowers find structures that comply while still meeting the funding need.

It depends on the buyer, the target, currency needs and tax. Offshore borrowing at a holding company level avoids some Bangladesh approval requirements and can give lenders security under a familiar legal system, but debt service then depends on dividends or other payments out of Bangladesh, which require tax and exchange control compliance. Local borrowing in taka avoids currency mismatch but is subject to local bank limits. Some deals combine an offshore holding facility with local working capital lines. We model the regulatory and tax consequences of each option so the buyer can choose the structure that fits.

Target guarantees and security, often called upstream support, need careful analysis in Bangladesh. Company law restrictions on financial assistance for acquiring a company's own shares, directors' duties, corporate benefit, related party approvals and the target's existing loan covenants can all limit what the target may provide, particularly before completion. Some support may be possible after closing. We assess what the target can lawfully give, when and with which approvals, and draft guarantee limitation language that protects directors while giving lenders meaningful credit support. Support given too early or without approvals may be challenged, so we sequence it around completion.

A Bangladeshi borrower taking foreign currency debt generally needs approval or registration through Bangladesh Bank, depending on the type of borrower, amount, tenor and pricing, and some investment-linked borrowing may involve Invest Bangladesh. Approval conditions can cover interest rates, fees, repayment profile and use of proceeds. Separately, the acquisition itself may require approvals for share transfers to non-residents, valuation and sector-specific consents. We map these approvals together, because a delay in one can hold up the other. Applications should be lodged once terms are agreed, to avoid delaying drawdown.

For private companies, lenders usually hold share certificates, signed undated transfer forms and powers of attorney, allowing them to transfer pledged shares to themselves or a buyer on default, subject to the articles and any pre-emption rights. Registration of the transfer by the company and, where a non-resident acquires shares, Bangladesh Bank requirements must be satisfied. Listed shares are pledged through the central depository and enforced under its procedures. Court involvement may be needed if the borrower resists. We draft pledges and articles with enforcement in mind from the start of the acquisition finance process.

Deductibility of interest depends on who the borrower is, how the borrowed funds are used and the current Income Tax Act rules on allowable expenses, thin capitalisation and related party payments. Interest paid by a holding company that only holds shares may not be deductible against the target's operating profits unless the structure allows consolidation or a post-closing merger. Withholding tax applies to interest paid to non-residents, now generally 10% under the Finance Act 2026, subject to treaty relief. We work with tax advisers so that the acquisition finance structure reflects realistic after-tax costs.

Acquiring a significant stake in a listed company triggers BSEC rules on substantial acquisition of shares and takeovers, which may require disclosure and, above certain thresholds, an open offer to other shareholders. The acquirer needs funding in place for the full offer obligation, and the timetable is driven by regulatory steps. Lenders often take security over acquired listed shares through the depository, with price-based protections. We coordinate the financing with the takeover process so that funding, disclosure and offer timing are aligned. Offer price and funding certainty should be settled before any announcement.

Acquisition finance documents usually include financial covenants, information undertakings and events of default that allow lenders to act early. Options range from waivers and covenant resets to injections of new equity, rescheduling, refinancing, sale of the business and, in serious cases, enforcement of security. In Bangladesh, enforcement through the courts can take time, and foreign exchange rules affect transfers of shares to foreign lenders, so negotiated restructuring often preserves more value. We advise lenders and sponsors on realistic options. Lenders should review their rights and notice requirements before the first covenant breach.