Issue of shares to the holders of convertible bonds and bonds with stock purchase
warrant is one of the legally permitted purposes of a conditional increase
of share capital. If shares are to be delivered to the bondholders in exchange
for in-kind contributions in this case, the transaction must be carried out in
accordance with special rules: – the general meeting resolution on conditional
increase must, in addition to other components, also determine the object of
the contribution and the person delivering it, as well as the number and eventually
nominal value of shares, secured in exchange for the contribution; – the
request for the registration of the general meeting resolution must be accompanied
by contracts, concluded for the acquisition of in-kind contributions,
and an auditor’s report on the control of their value. The aforementioned legal
requirements can be met, if the bonds are issued prior to passing the general
meeting resolution on conditional share capital increase. In the opposite case
– i.e., if bonds are issued only after the resolution has been passed – that is
obviously not feasible. It is therefore in such a situation necessary to find an
alternative solution, should the issue of shares in exchange for in-kind contributions
be rendered possible. That solution is an analogous application of legal
provisions on in-kind contributions to the authorized capital.
Key words: conditional increase of share capital, in-kind contributions, authorized
capital, convertible bonds, bonds with stock purchase warrant, hybrid
bonds