H.1 The voluntary sale of shares/partnership capital is likely to be the main way of extracting value from the JV (distributions and licensing fees/royalty payments being the other main ways). The strategy for selling the shares/capital and realising value should therefore be considered in detail when forming the JV.
H.2 Participations can be sold to other existing participants or third parties in a variety of ways (either a sale of part or all the participation held by one party), including trade sale or the flotation of all or part of a JV.
H.3 As the JV has been set up by agreement of at least two parties for a specific purpose, it is important to have a degree of control other the ability of either party to sell their respective participations. It is usual to include in the JV Agreement (or in the case of a company limited by shares, the Articles of Association) specific principles that may prevent a party from selling its equity interest or may restrict a party's ability to sell that interest to an unknown third party. It is commonly the case that some form of pre-emption mechanism is in place allowing the option for the non exiting party to acquire the shares/partnership interest of a party requiring a voluntary exit.