Part II, Renewable Energy Facility M&A in Kazakhstan:
Due Diligence Issues for Consideration
Corporate structure research within the framework of legal, due diligence covers the history of the legal entity, from its initial registration until the DD date, including the identities of the participants, charter capital, participatory interest disposal, tax indebtedness, etc. In examining a company's corporate structure, one must pay attention to the previous shares transfers and the documents confirming such transfers (i.e. Sale-Purchase Agreement).
In general, as of practice, foreign investors usually apply for the legal form of the legal entity that is simpler. And instead of a joint stock company (JSC), investors establish a limited liability partnership (LLP).
COMPETITION AND ANTITRUST
GRID CONNECTION ARRANGEMENTS
POWER PURCHASE AGREEMENT
within 24 (twenty-four) months from the date of signing the PPA for solar power plants,
within 36 (thirty-six) months from the date of signing the PPA for wind and biogas power plants,
within 60 (sixty) months from the date of signing the PPA for hydroelectric power plants. The developer is entitled to request a 6-month extension.
CONSENTS AND PERMITS
Does the corporate structure include any shareholder loans that need to be assigned to the lenders along with the shares of the project company and any intervening companies?
Any outstanding obligations or financial commitments under any project agreements, licences, or approvals.
Does the RE project company have any restrictions on giving security over all or part of the project or assigning rights under the project agreements as security to its lenders?
What security interests have been created over the power station, the project agreements and other relevant assets?
How will default under the financing arrangements affect the power station’s operation? Do lenders have “step-in” rights? If so, under what circumstances?