Denmark: the resolution has to state a subscription price

Denmark permits convertible debt instruments but asks the resolution to put a price on the page. Section 169 of the selskabsloven requires the resolution creating them to state the tegningskurs, the subscription price, and section 31 bars subscription below par. Whether a stated formula satisfies that is unresolved, so the workable Danish design carries a stated minimum conversion price.

That applies to a rettet emission, the directed issue, as much as to any other route.

Key takeaways

• The price is a resolution item. Section 169(2) requires the resolution issuing konvertible gældsbreve or warrants to state a list of terms, among them the maximum capital increase, the class of shares, the subscription period and the tegningskurs.
• Underkurs is prohibited outright. Section 31: kapitalandele kan ikke tegnes under forbehold eller til underkurs — capital shares may not be subscribed subject to reservation or below par.
• The longest authorisation clock in the region. Section 155 permits an authorisation to the centrale ledelsesorgan for one or more periods of up to 5 years at a time, against two years in Norway and a single meeting cycle in Sweden.
• No Danish transaction was found. No committed equity facility and no floating-price convertible by a Danish listed issuer could be identified for this note. Legally navigable, commercially untested.

The sentence that decides Denmark

Convertible debt instruments are issued under section 167 by the general meeting with the majority required to amend the articles, which must at the same time resolve the corresponding capital increase, or by the central governing body under an authorisation. Section 169 then sets out what the resolution has to contain, and subsection (2) is where the Danish question lives: the resolution must state, among other terms, the size or number of the capital shares and the tegningskurs.

A subscription price is a figure in ordinary Danish drafting. A market-referenced convertible has no figure at the date of the resolution; it has a method for producing one later. Whether that method is a tegningskurs for the purposes of section 169(2) is not answered by any published source found for this note, and it decides whether Denmark is constrained or closed. Until it is answered, the defensible structure is a formula bounded by a stated minimum, so the resolution contains a number a registrar can read.

Underkurs: a floor with no cash cure

Section 31 is eleven words long and does two jobs. Capital shares may not be subscribed under forbehold, subject to reservation, and may not be subscribed til underkurs, below par. The first limb is worth pausing on for a standby structure, because a commitment to subscribe on future demand is a conditional arrangement in commercial terms even where each individual subscription is unconditional when made. The second limb sets an absolute floor.

That floor is the point on which Denmark separates from its nearest neighbour. In Sweden the floor is quota value, and Swedish practice deals with a shortfall by paying the difference in cash at conversion. No equivalent Danish cure was identified. A Danish issuer whose share price approaches its nominal value is therefore looking at a capital reduction before it is looking at a convertible.

The five-year bemyndigelse, and the pre-emption waiver

Where Denmark is genuinely attractive is authority. Section 155 lets the general meeting, by a provision in the articles, authorise the central governing body to increase the share capital, for one or more periods of up to 5 years at a time, with the maximum amount stated in the articles. Section 155 also requires the articles to record a decision of the general meeting to deviate from the pre-emption rights in section 162.

Section 162(1) gives capital owners a right to proportional subscription on every cash increase, and 162(2) lets the meeting deviate in favour of others with the majority required to amend the articles. Subsections (5) and (6) add protections where the deviation worsens a shareholder's position beyond what the notice disclosed, or disadvantages a class. With the five-year clock, the corporate architecture for a multi-year facility is better here than almost anywhere in the region. It is the pricing sentence, not the authority, that constrains.

Delivery, resale and the prospectus

The back end is clean. There is no Danish holding period and no resale registration. Shares issued on conversion are registered with Euronext Securities Copenhagen and are fungible with the listed line. On Nasdaq Copenhagen, a regulated market, admission of securities fungible with an existing line is exempt below 30% of the number already admitted over 12 months, raised from 20% by Regulation (EU) 2024/2809; on Nasdaq First North Growth Market Denmark, an MTF, no admission prospectus arises. Denmark is an EU member, so the raised threshold applies directly, which is not true of Norway.

The comparisons that repay reading are Finland, where the gate is a qualitative test rather than a drafting requirement, and Germany, where the same absolute par floor governs. On instruments see convertible debt financing for listed issuers and share subscription facilities. A Danish issuer with US holders should read Rule 144 and restricted securities. Send the articles and the nominal value per share.

• All markets
• Sweden
• Finland
• Germany

Primary sources

• Prospectus Regulation, consolidated

Orientation

Commentary, press and unofficial texts: useful for orientation, never the citation of record.

• Selskabsloven section 31 — no subscription below par
• Selskabsloven section 155 — the five-year authorisation
• Selskabsloven section 162 — pre-emption
• Selskabsloven section 169 — the tegningskurs requirement

Financing a Danish listed issuer: frequently asked questions

Can a Danish listed company issue a convertible with a floating conversion price?

Not straightforwardly. Section 169 of the selskabsloven requires the resolution issuing convertible debt instruments to state a list of terms including the tegningskurs, the subscription price. Whether a stated formula, such as a discount to a future average, satisfies that requirement or whether a figure is needed is not settled by any published source found for this note. The workable Danish design carries a stated minimum conversion price.

What does section 31 prohibit?

Section 31 provides that capital shares may not be subscribed subject to reservation or at underkurs, below par. The floor is absolute, and unlike the Swedish quota-value rule no mechanism for curing a shortfall by a cash payment at conversion was identified here. It is tested when the shares are subscribed, which on a convertible means at each conversion.

How long can a Danish board authorisation run?

Section 155 lets the general meeting, by a provision in the articles of association, authorise the central governing body to increase the share capital for one or more periods of up to 5 years at a time. That is the longest standing authorisation clock in the Nordic region and it suits a multi-year facility. The articles must also record any deviation from pre-emption rights.

Has any Danish issuer actually done one of these?

None was identified for this note. No Danish committed equity facility and no Danish floating-price convertible could be found, which is itself a meaningful fact. Denmark is better described as legally navigable and commercially untested than as an active market for the structure, and an issuer should expect counsel and the register to be seeing the shape for the first time.