Services for Issuers Services for Participants Other services News and statistics Documents and Forms Log on

Decrease in share capital / redemption

A company can reduce its share capital with or without recalling shares. A decrease in share capital without calling in shares can be executed with or without repayment.

A decrease in share capital can take place without a change in the articles of association in those cases where the articles of association specify an upper or a lower limit for the share capital and the decrease does not go under the lower limit as specified in the articles. In the event that the articles of association specify a fixed amount for the share capital, an amendment to the articles must always be made. A decrease in the share capital requires the decision of a general meeting of shareholders unless a redemption restriction exists in the articles of association.

Decrease in share capital without recalling shares with repayment

If the company decreases its share capital without calling in the shares with repayment, it is important that the company informs Euroclear Sweden in good time in order to ensure that the proposed measure is practically possible to implement. If the repayment is to be made in a form other than cash, any possible consequences must be investigated with regard to taxation.

Voluntary recalling of shares with repayment / Redemption

A voluntary recalling of shares with repayment (hereafter called redemption) entails a decision on decrease of the share capital by giving the shareholder the option of accepting an offer of recall.

If the company’s shares are listed and the board has been given a mandate to determine a record date and redemption amount, the company must immediately inform
Euroclear Sweden after the board has made the decision, and at the latest two banking days before the record date.

An issuing agent is required for the handling of a redemption with repayment. The issuing agent orders a deposit of securities in which each share is entitled to a special right (SR). In conjunction with the redemption the SR is called “Redemption right”. These rights, together with the shares to be redeemed, are exchanged for the quantity of redemption shares (AK IL) authorised by the decision at the general meeting of shareholders.

A final registration of the decrease is made when the Swedish Companies Registration Office (Bolagsverket) has granted permission for the decrease. A definite order is sent to Euroclear Sweden following a final registration at Bolagsverket, we reduce the share capital, AK IL can be de-registered and payment made via the VPC system.

Compulsory recall of shares

A company can carry out a compulsory recall of shares if the decrease of the share capital is to take place without the individual shareholder having any choice in the matter. At an early stage, the Issuer should consult Euroclear Sweden to ensure that the proposed measure is practically possible to implement.

Apart from the information specified in the Swedish Companies Act, the decision of the general meeting of shareholders on a compulsory recall of shares shall contain an order date, that is the date when the shareholder is to have the shares recalled, together with information about how many shares are to be recalled. A decision on decrease shall be registered at Bolagsverket. A compulsory recall of shares may take place with or without repayment.

The company can in addition repurchase its own shares on the market in order to cancel these shares and thus bring about a decrease without any offer to the shareholders.

E-mail:

Infomation about the website