MAJORAREA CAPITALULUI SOCIAL AL UNEI SOCIETĂŢI COMERCIALE PRIN COMPENSAREA (CONVERSIA) CREANŢELOR
“INCREASING THE SHARE CAPITAL OF A COMPANY BY THE CLAIM SET-OFF” (DEBT-FOR-EQUITY SWAP)”

Summary/Abstract: This study analyses increasing the share capital through debt-to-equity procedure applicable irrespective of the legal form of the company. Such procedure is a hybrid between the share capital increase from external sources (new contributions) and from internal ones (realignment of the balance sheet). It is fundamentally different than the increase of the share capital by contributing a claim, which is a form of increase through new contributions, whereas debt-to-equity is a form of settlement from civil law (and not a novation), so that does not require the consent of the company through its general assembly, because operates automatically. Claims that are settled against contributions for the newly issued shares must be certain, liquid and due. Debt-to-equity procedure does not preclude the pre-emptive right of the shareholders to subscribe the newly issued shares, except when it is based on an option issued to the creditor, including a bond holder. Despite the conversion rights, the issue cannot be made without an approval from the general assembly, except when there is an authorized capital, within its limit. Subscription option which is, comparing to conversion option, the specific difference within near kind, is a particular form of promissory sell, where the company, as a legal person, is the promisor. Once the promissory is issued, it does not need to be approved by the general assembly, as long as it has the legal force of an act of the company.

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