Recent developments in Spanish company law will favour access by Spanish companies to new financial mechanisms. One of these developments relates to the possibility for Spanish companies — previously not recognized by law — to issue redeemable shares (acciones rescatables), as an instrument through which the company may obtain additional funds for a limited time. This type of share represents an intermediate between fixed-income and variable-income securities. The main features of this new regime are as follows:
- it is available only to public companies, ie those whose shares are quoted on the stock exchange;
- the number of redeemable shares to be issued may not exceed 25% of the company's share capital, and they should be fully paid-up at the time of subscription;
- the shares may be redeemable either on request by the company itself, the shareholders, or both; and
- when the shares are redeemable only on request by the company, no request will be allowed within three years of the issue date. Otherwise, the company resolution authorizing the issue should address the specific regime for redemption, no particular regime being provided for by law.
Redemption of the shares should be financed either from the company's profits or available reserves, or else with funds raised by a new issue of shares carried out for these purposes. Otherwise, the operation is seen as a share capital decrease carried out through repayment of contributions, where a right to oppose the redemption is afforded to the company's creditor under certain circumstances.
Luis de Carlos and César Ramirez
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