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A mandatory offer requirement will not apply when enforcing share pledges until 1 January 2011
Practical Law UK Legal Update 9-503-2100 (Approx. 2 pages)
A mandatory offer requirement will not apply when enforcing share pledges until 1 January 2011
by White & Case LLP
| Published on 31 Aug 2010 • Russian Federation |
This article is part of the PLC Global Finance August 2010 e-mail update for the Russian Federation.
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The mandatory offer requirement, established by the Law on Joint Stock Companies, was not applicable in the context of a share pledge enforcement until 1 January 2010. On 27 July 2010, the President signed a law extending the term during which this requirement is not applicable to 1 January 2011.
On 27 July 2010, the President signed Federal Law No. 218-FZ regarding the application of the mandatory offer requirement in the context of share pledge enforcement. The Law entered into force on 10 August.
The mandatory offer requirement established by the Law on Joint Stock Companies was not applicable in the context of a share pledge enforcement until 1 January 2010 (this requirement implies that an acquirer of shares above certain thresholds must make a buy out offer to the other shareholders). The Law extends the term during which this requirement is not applicable to 1 January 2011.
Therefore, where a share pledge secures a debt toward a credit organisation and, following the borrower's default, the credit organisation or a third party acquires the pledged shares, they are exempt from the mandatory offer requirement until 1 January 2011.