Many companies and businesses are facing solvency crisis following the Covid-19 pandemic. What corporate rescue options do companies have under the Companies Act, 2016? 

Corporate Voluntary Arrangement

The Corporate Voluntary Arrangement (“CVA”) is a binding arrangement made between the company and its creditors without involving the approval from Court whilst the directors remain to hold management control over the company. 

Judicial Management

The Judicial Management procedure (“JM”) will allow distressed company or its creditors to apply to the Court for an Order to place the management power of the company in the hands of a qualified insolvency practitioner, known as the Judicial Manager. However, the company must not be a licensed institution or operator of a designated payment system regulated under the laws enforced by the Central Bank of Malaysia and not a financial market institution under the Capital Markets and Services Act, 2007.