Tighter deadlines for pre-emptive rights execution and squeeze-out simplications aid local companies. By Yuliya Shibukova, Relationship Manager, GSS Russia
The President of Russia signed legislative changes to the Law on Joint Stock Companies, reducing the deadline for placement of additional shares and expanding capitalisation possibilities.
The law now prescribes that eligible shareholders can exercise their pre-emptive rights to purchase additional shares of joint-stock companies within a period of 12 days, instead of the previous deadline of no less than 45 days, from the date of the publication of the announcemenet. The provision will initially apply only to banks and to joint-stock companies with state participation of more than 50%, until 1 January 2017, and will be extended to all joint-stock companies after that.
The law also simplifies a particular squeeze-out scenario in case of reorganisation in the form of merger, where a company with a sole shareholder merges with a second company with minority shareholders resulting in a new joint-stock company with minority shareholders that own less than 5% of the new company's capital. The law provides such majority shareholder with the right to launch a voluntary tender offer to the remaining minority shareholders during 5-year period after the reorganisation. If more than 50% of the addressed shareholders accept the tender offer, the initiator can buy out all shares at the tender offer price on mandatory basis within 6 months of the expiration of the tender offer acceptance period.
Yuliya Shibukova
Relationship Manager
GSS Russia
yuliya.shibukova@unicredit.ru