5.10 Shares as a Source of Cash 235shares could not be issued without a decision to increase share capital in addition
to a decision to issue new shares. EU company law does not require a nominal
value. Shares can have an accountable par value instead of a nominal value.^493
The general meeting approved a resolution to authorise the board to decide on
increasing the company’s share capital through a new issuance of shares.^494 The
resolution laid down a maximum amount but no minimum amount.
Price. The general meeting decided on the price payable for the shares.
However, instead of regulating the price in detail, the general meeting stated that
the price would be determined on the basis of a bookbuilding method and
authorised the board of directors to determine it.^495
When deciding on the IPO, the board also decided that the initial offer price
range was €20.00–24.00 per share. According to the terms of the offer, investors
paid €24 per share in connection with subscription commitments. After the
allotment of shares and the fixing of the price payable for shares, excess payments
were to be returned to investors according to the terms of the offer.
Withdrawal of pre-emption rights. As the shares were to be offered to domestic
and international institutional investors and the public in Finland, it was necessary
to withdraw existing shareholders’ pre-emption rights.^496 The board was
authorised to decide on this issue as well.
As required by the governing law, the board of directors presented to the
general meeting a written report indicating the reasons for withdrawal and
justifying the proposed issue price.^497 According to the board, the company would,
by means of the new issue, expand the number of its shareholders with new
investors, create new sources of financing, facilitate the use of shares as
consideration in connection with acquisitions, and improve the possibilities of
utilising share-based incentive systems for the company’s personnel. As regards
the price, the use of the bookbuilding method was said to ensure that the price
payable for the shares would be their market value.
Conditions. Some resolutions were subject to particular conditions. The general
meeting prohibited the filing of the resolutions on the increase in share capital and
amendment of articles of association with the trade register before the signing of
an Underwriting Agreement or after a certain date.
Board decisions in anticipation of the IPO. Like the general meeting, the board
of directors took many decisions in anticipation of the IPO. First, all resolutions of
the general meeting taken in anticipation of the IPO were based on proposals
submitted by the board. Second, the resolutions authorising the board to decide on
matters relating to the IPO were also based on proposals submitted by the board.
Board decisions on the IPO. The board of directors decided on the IPO after
being empowered to do so by the general meeting.
(^493) Articles 3 and 8(1) of Directive 77/91/EEC (Second Company Law Directive).
(^494) Article 25(1) of Directive 77/91/EEC (Second Company Law Directive).
(^495) Article 25(2) of Directive 77/91/EEC (Second Company Law Directive).
(^496) Article 29(4) of Directive 77/91/EEC (Second Company Law Directive).
(^497) Article 29(4) of Directive 77/91/EEC (Second Company Law Directive).