Document background
The Equity Commitment Letter is a fundamental document in New Zealand investment transactions, particularly in private equity, M&A, and significant corporate investments. It is typically used when an investor or consortium needs to provide formal assurance of their ability and intention to fund a transaction. The document, governed by New Zealand law and subject to local regulatory requirements including the Financial Markets Conduct Act 2013, serves as a bridge between initial investment discussions and final transaction documentation. An Equity Commitment Letter includes critical details such as commitment amount, funding conditions, timing, and termination rights, providing security to transaction counterparties while protecting investors through carefully structured conditions precedent. The document is particularly important in transactions where there is a time gap between commitment and funding, or where third-party reliance on the funding commitment is required.
