El Corporate Law Working Group arose in FIDE with the aim of carrying out a reasonably in-depth analysis of the state of Spanish capital company law, for which it meets periodically to analyze current legislation, and discuss the problems of interpretation and application by the various legal agents, and proposing , where appropriate, the reforms that could improve its regulatory quality. In order to include in said analysis the best contributions from the public and private spheres, a plural composition is established, with professionals from the judicial, academic, legal, and business fields.
On December 1, this Working Group held a session to comment on some issues on the new regime of capital increases and convertible companies.
The content of this session is part of the analysis of the Draft Law that modifies the consolidated text of the Capital Companies Law, carried out by the Corporate Law working group, and the usual professionals of the same participated in it.
The session was moderated by Mar Hernández and intervened as speaker Javier García de Enterría, who draws the following conclusions about said new regime:
- Con carácter general, the regulatory purpose of the reform of the capital increases and issuance of convertible bonds is positively valued by listed companies, included in the Bill to transpose the EU Directive on long-term involvement of shareholders of listed companies, which is currently in parliamentary proceedings; Specifically, the purpose of streamlining and simplifying the performance of these operations, eliminating formal requirements that now hinder and complicate their performance without responding to any legal interest, is especially appropriate in the current economic circumstances, due to the need in which they are foreseeable. to find numerous listed companies to seek financing through the market.
- In any case, there are some provisions that should reform to comply with Community law, as would be the case of the reduction to 10 days of the minimum period of exercise of the pre-emptive subscription right or the new rule on incomplete subscription of capital increases, which are of doubtful compatibility with Directive (EU) 2017/1132, on certain aspects of company law (article 72.3 and article 71, respectively)
- The general elimination of the requirement for an independent expert report designated by the Commercial Registry, which is now required in any case of exclusion of the pre-emptive subscription right of the former shareholders, and in the specific case of convertible bonds in relation to the bases and modalities of the conversion; is about a report that does not perform any real function in listed companies, due to the existence of a market price or quoted value that represents the best indicator of the value of the share and that conditions any possibility of financing a company, and that instead delays and hinders the performance of these operations, reducing agility and flexibility for companies to take advantage of market opportunities or 'windows'
- As well the possibility of creating and delivering the new shares is favorably valued once the execution deed of the capital increase has been granted, prior to its registration in the Mercantile Registry, which should allow a reduction in the period of illiquidity that investors currently endure from the moment they subscribe and pay the shares until they receive them; In any case, the practical effectiveness of this regime could be affected by the uncertainty about the effects of a possible lack of registration of said deed, by the possibility that the banks that place and, where appropriate, ensure the issuance continue to require the registration of writing to avoid any risk.