Document background
The Direct Placement Agreement is a crucial document used in Nigerian private capital markets when companies wish to raise capital by issuing securities directly to specific investors without a public offering. This agreement type is particularly relevant when companies need to raise substantial capital quickly while maintaining control over their investor base. The document must comply with Nigerian securities laws, particularly the Investment and Securities Act 2007 and SEC regulations. It contains detailed provisions covering the placement terms, regulatory compliance requirements, investor qualifications, and transaction mechanics. Direct Placement Agreements are commonly used for both equity and debt securities and can be particularly useful for companies seeking strategic investors or looking to avoid the complexities of a public offering. The agreement must address specific Nigerian regulatory requirements, including SEC approvals, foreign investment restrictions if applicable, and corporate authorization requirements under CAMA 2020.
