8.6.2017

Wrapping up the 2017 General Meeting Season

With Midsummer rapidly approaching, it’s time to close the minutes on the main annual general meeting season for listed companies in Finland. Over the past spring, we assisted nearly twenty companies listed on the Helsinki stock exchange and a number of other public and private companies in holding their general meetings. This past season brought with new developments, and we thought we’d share a few of our observations.

Increasingly Active Institutional Investors

Large pension insurance companies are major shareholders in many Finnish listed companies, and their policies have a major impact on how listed companies are run here. For example, during this past general meeting season Ilmarinen Mutual Pension Insurance Company announced a blanket shareholder policy that it will not vote for share issue authorisations for boards if they exceed ten per cent of the company’s total number of shares or are valid for over 18 months.

Ilmarinen justified this position by stating that it does not want new shares to dilute its holdings excessively, and that it wants the validity of authorisations to be limited to the term of the board being elected in the meeting in questions. We thought Ilmarinen’s new policy concerning the maximum size of share issues authorisations was a surprising move, as it differs from general market practices and international voting recommendations.

It is a good idea for major shareholders to inform listed companies of planned policy changes in good time before the general meeting. Institutional investors and law firms that regularly assist in general meetings should work together to make sure that companies preparing for their general meetings are well informed of what to expect.

We believe that institutional investors will take an increasingly active approach to their holdings in the years to come, as growing social interest and scrutiny leads them to pay more attention to the responsibility of their investment and ownership practices.

More Extensive Auditor’s Reports and Key Audit Matters

Amendments to the Auditing Act led to auditor’s reports being longer and more tailored this year. They now provide more comprehensive information than just a statement that the accounts have been drafted in compliance with the law.

Auditors presented the new style of auditor’s report and auditing process in many general meetings this season. Their presentations and the key audit matters describing the nature and the company’s operations and its finances were interesting and brought a breath of fresh air to the meetings. Contrary to our expectations, these presentations did not give rise to much discussion. This could be for the best, though, as answering questions about the company is the job of the management, not the auditors.

Say-on-Pay Directive to Put Remuneration Schemes on General Meeting Agendas

The changes brought by the ‘say-on-pay’ directive will also have an impact on Finnish general meetings in the coming years. The amendments made to this EU directive governing shareholder rights will lead to remuneration policies having to undergo a more thorough review in general meetings in a few years from now.

Once the amendments to the directive have been adopted in Finnish legislation, shareholders will discuss remuneration systems and reports in general meetings. To date, it has only be necessary to discuss the remuneration of the board. In order for this reform to be successful, companies will have to draft their remuneration proposals with great care and shareholders will have to be willing to discuss the subject constructively.

Latest references

We act as the lead legal counsel in the groundbreaking case of Multitude SE’s (Multitude) proposed relocation from Finland to Switzerland. The first phase of the relocation, involving the transfer of Multitude’s registered office from Finland to Malta pursuant to SE Regulation, was successfully completed on 30 June 2024. In this connection, Multitude’s shares were removed from the Finnish book-entry system and the issuer central securities depository of the shares changed from Euroclear Finland Oy to the CSD operated by the Malta Stock Exchange. In practice, all of Multitude’s shares are now held through Clearstream. In Malta, the company is anticipated to be converted into a public limited liability company under Maltese law, following which it will seek redomiciliation from Malta to Switzerland. Given that Finnish legislation does not allow for direct relocation to a non-European Economic Area country such as Switzerland while preserving the company’s legal personality, the process necessitated a multi-jurisdictional strategy as outlined above. Our mandate encompasses advising Multitude on all aspects governed by Finnish law concerning the proposed relocation and coordinating the work of local legal counsel and various other advisors involved in the project. The process also involved a written procedure to amend Multitude’s existing subordinated capital notes and senior bonds to facilitate the relocation as well as placement of EUR 80 million senior guaranteed notes by a newly established Multitude Capital Oyj. ”The transfer to Malta marks a significant step in Multitude’s journey. This pioneering and complex process has been successfully implemented with the invaluable support of our own team and advisors. Castrén & Snellman has masterfully orchestrated the entire project, ensuring seamless coordination across multiple jurisdictions. We look forward to achieving our next step with the further relocation to Switzerland”, says Jorma Jokela, Multitude’s CEO. Multitude is a fully regulated growth platform for financial technology, employing over 700 individuals across 25 countries. Its shares are listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange.
Case published 1.7.2024
We advise Evli, a leading Nordic investment and wealth management company, in a strategic partnership with Bregal Milestone. The objective of the strategic partnership is to grow the business of Evli Alexander Incentives Oy. In connection with the strategic partnership and to reflect its new vision and strategy, Evli Alexander Incentives Oy will be rebranded to Allshares Oy. As part of the partnership arrangement Bregal Milestone has agreed to invest over EUR 65 million in Allshares to acquire shares owned by certain minority shareholders and to fund future organic and inorganic growth in the company. Following completion of the arrangement, Bregal Milestone will own 55 percent of the shares and votes in Allshares, Evli Plc will own 42 percent, and Allshares’ management will own the remaining 3 percent. The arrangement will mark a significant strategic and financial partnership for Evli Plc and is expected to increase the value of Evli Plc’s ownership in Allshares over a longer period. ‘We are very excited to partner with Bregal Milestone, who shares our vision of becoming the leading provider of share-based incentive and compensation plan management and design in Europe and beyond. With their support, we will be able to accelerate our growth, invest in our platform, and enter new markets. We believe that this partnership will create significant value for our clients, employees, and shareholders,’ Maunu Lehtimäki, CEO of Evli comments. Bregal Milestone is a leading European growth private equity firm and enjoys a strong track record in scaling Nordic champions across Europe via organic and inorganic growth. Bregal Milestone will bring strategic guidance, operational support, financial resources, and access to its deep network of partners and contacts to accelerate organic and inorganic growth of Allshares.
Case published 7.3.2024
We advised SATO Corporation and lead manager Skandinaviska Enskilda Banken AB (publ) Helsinki Branch in a rights issue. SATO received gross proceeds of approximately EUR 200 million from the issue. SATO Corporation is an expert in sustainable rental housing and one of Finland’s largest rental housing providers. SATO owns around 25,000 rental homes in the Helsinki Metropolitan Area, Tampere and Turku. Approximately 45,000 residents live in SATOhomes.
Case published 29.2.2024
We advised Oomi Oy in a partial demerger where Oomi’s solar power business for corporate customers demerged and formed a new independent company, Oomi Solar Oy. As part of the partial demerger process, we assisted Oomi in pre-emptive discussions with the tax authorities where the tax treatment of the restructuring was confirmed. Oomi Solar, the demerged company, focuses on implementing solar power plants for real estate properties, ground-level solar power plants and industrial solar power parks and supports companies and entities in their transition towards renewable energy. Oomi Solar started operations on 1 January 2024.
Case published 12.2.2024