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Directed issues and off market transactions
A directed (share) issue means that a company directs an issue to investors that are decided upon beforehand, and where only the parties included in the board decision of the directed issue is allowed to subscribe. The offer is hence not directed to the public like in an IPO, but the company has made a formal decision on an Extra General Meeting who shall subscribe in the issue. Directed issues can be conducted due to a acquisition of a real estate or a conversion of a loan, or a simple investment to strengthen the owner base in the company.
Important to consider
According to the Swedish Companies Act, a company is in first hand obliged to direct an issue to their existing shareholders to raise new capital. The company is however allowed to make exceptions from this if the reason is legitimate, and direct the issue to a beforehand agreed upon group of investors and thereby overlook the existing shareholders pre emptive right to subscribe for new shares.
For a Euroclear affiliated company a directed issue always means that shares or other financial instruments are to be delivered to one or several parties, regardless of the reasons to conduct the issue in the first place. Nordic Issuing as an issuing agent is able to carry out this process, including the communication with Euroclear. A directed issue also means a few legal documents needs to be drafted along with a registration at the Swedish company registration office, which is most often administrated by the company’s legal advisor.
Off market transactions
An off market transaction means that a sale of an financial instrument (most often shares) in a greater volume is conducted to one or several parties. The seller and buyer(s) is decided upon beforehand, along with a price and number of shares and the transaction is made outside of the market. To be able to carry out an off market transaction, an issuing agent is required to administrate the transaction. Nordic Issuing is able to act as a intermediator between seller and buyer, and oversees the process so that both parties are met according to agreement.