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The Convertible Bond Agreement is a crucial financing instrument used by Malaysian companies seeking to raise capital while offering investors the flexibility to convert their debt investment into equity. This document is typically employed when a company needs to secure funding but wants to offer more attractive terms to investors through the conversion feature. The agreement must comply with Malaysian regulatory requirements, including the Capital Markets and Services Act 2007 and Companies Act 2016, and typically includes detailed provisions about conversion rights, interest payments, default scenarios, and security arrangements. It's particularly useful for growth-stage companies or those planning significant expansions, as it allows them to secure funding with potentially lower initial interest rates while giving investors the opportunity to participate in the company's future equity upside.
