Issue 4: Convertible loans: key issues and practical advice on structuring

The convertible loan structure as a means of financing and subsequent participation in the equity capital of venture capital and other companies is commonplace in various jurisdictions. Until recently, there was no direct regulation of such instrument in Russia, which is why convertible loans were structured either under foreign law or under Russian law using other complex (and often cumbersome) legal structures. Russian legislation regulating convertible loans, came into force on 13 July 2021¹ and was intended to simplify the conclusion of investment transactions. Over the more than six months that have passed since then, a number of practical issues have arisen in the course of implementing convertible loan model under the new law.

In Issue 4 of the Survival Guidelines for Transaction Practitioners, we look into some of these issues and provide guidance as to how to address them.

Download Issue 4 below.

¹ Federal Law No. 354-FZ "On Making Amendments to Certain Legislative Acts of the Russian Federation" of 2 July 2021.