Archive for April, 2017

BOYANOV & Co. Holds Top Places in 2017 Rankings of Chambers and Partners and The Legal 500

Wednesday, April 12th, 2017

BOYANOV & Co.’s excellent market reputation and standout expertise of its individual practitioners have once again been confirmed through the results of the latest research of two of the most reputable legal directories – Chambers and Partners and The Legal 500.

Chambers Europe 2017 ranks BOYANOV & Co. a Band 1 law firm in: Banking and Finance, Competition / Antitrust, Corporate / Commercial, Dispute Resolution, Real estate and construction, Restructuring and Insolvency, and IP.

The Legal 500 commends BOYANOV & Co. as a Top Tier legal services provider in: Banking and Finance, Capital Markets, Commercial, Corporate and M&A, Dispute Resolution, EU and Competition, TMT and Healthcare and Life Sciences.

According to Chambers Global 2017 the firm is Band 1 in both researched areas for Bulgaria: Corporate /Commercial and Dispute Resolution. Six practitioners have been individually listed in the prestigious rankings of Chambers Global to be among the world’s very best lawyers. Mr. Borislav Boyanov is ranked an Eminent Practitioner in Corporate/Commercial, described as a highly respected figure and “one of the leading lawyers in Bulgaria.” and recognised in particular for his work for international investors;  Yordan Naydenov, Alexander Chatalbashev, and Damian Simeonov are also recommended practitioners in Corporate/Commercial; Kina Chuturkova and Boyko Voynov are recognized litigation experts in Dispute Resolution.

B&Co. Chambers EUROPE 2017 Personlized - small B&Co. Chambers GLOBAL 2017 Prsonalized - Small Top_tier_firms

Proposed amendments to deals of listed companies that require prior shareholder approval

Monday, April 3rd, 2017

The financial regulator (the Financial Supervisory Commission or the “FSC”) has proposed to Parliament to amend the law that regulates listed companies (the Public Offering of Securities Act).

One of the proposed amendments will change the rules regarding the need of a prior shareholder approval of certain deals entered into by listed companies.

This amendment (if approved by Parliament) will be important given that without prior shareholder approval these deals are null and void ex lege (in contrast to the general rule applicable to non-listed companies that a deal is valid and binding on the company even if it was not approved by the relevant corporate body of the company).

In principle, under the current rules listed companies cannot buy, sell or otherwise dispose of or give as security assets above a certain value (based on their balance sheet) without a prior shareholder approval of the deal (taken without counting the votes of a significant shareholder if the deal is with it or its affiliates). Deals entered into without such shareholder approval (where needed) are null and void, i.e. they do not bind the listed company. Hence any third party entering into a deal with a listed company must make sure the shareholder approval (where needed) is granted at the risk of the listed company not being legally bound by the deal.

There are certain exceptions regarding deals made in the ordinary course of business of the listed company. But so far the exception failed to capture for example taking bank loans (as it is often difficult to determine with certainty whether taking a bank loan is within the ordinary course of business of a company, particularly where the bank loan is a large one or for a large project or investments rather than normal bank overdraft or working capital bank loan).

One of the proposed amendments will allow listed companies to take any bank loans and give any security for them (regardless of the size of the loan or the value of the security) without the need of a shareholders approval for validity of the deal.

The other proposed amendment will allow listed companies to guarantee or secure bank loans taken by a subsidiary of the listed company.

The FSC has not given any reasons for proposing these amendments, but the FSC probably takes the view that in the case of taking a bank loan the management of a listed company or its significant shareholders cannot abuse the rights of the minority shareholders or wants to give more flexibility to the management of listed companies regarding the bank financing of listed companies.

In addition, the FSC has proposed to exclude from the rule requiring a prior shareholder approval reinsurance deals made by insurers or reinsurers whose shares are listed.

Listed companies may be allowed to distribute interim dividends

Monday, April 3rd, 2017

The financial regulator (the Financial Supervisory Commission) is proposing to Parliament to amend the law that regulates listed companies (the Public Offering of Securities Act). One of the proposed amendments will allow listed companies to distribute interim dividends, i.e. dividends out of profits generated in the year in which the dividend is declared.

At the moment companies in Bulgaria, including listed ones, can only declare and distribute dividends from profits generated in a given year after the shareholders meeting of the company approves the company’s annual financial statements for that year (and provided they indicate that the company has sufficient distributable profits). This means that companies cannot distribute dividends from profits generated within a given year before that year has ended and before the annual financial statements for that year had been prepared and audited.

If the proposal is approved by Parliament listed companies will be allowed to declare and pay dividends out of profits generated in the first 6 months of the year. This will require the approval by the shareholders meeting of the listed company of 6-months financial statements of the company. The financial statements must also be audited.

The proposal is aimed to make investments in shares of listed companies more attractive by allowing more frequent dividend distribution by them.

In addition, the FSC has proposed to exclude from the rule requiring a prior shareholder approval reinsurance deals made by insurers or reinsurers whose shares are listed.