Draft Terms of Demerger and Public Notice to Creditors

The demerger process begins with the draft terms of demerger prepared by the Boards of Directors of the companies involved in the demerger, which must be submitted to the Trade Register for registration within one month of signature. The draft terms of demerger shall be accompanied by an auditor’s statement containing the grounds for determining the demerger consideration and the distribution of the demerger consideration. In regard to the acquiring companies, such a statement shall also indicate whether the demerger may compromise the repayment of the acquiring companies’ debts. If all the shareholders of the companies involved in the demerger consent to the same, only a statement on whether the demerger is conducive to compromising the repayment of the acquiring company's debts is sufficient. Such statement is not required for the companies to be incorporated in the demerger if all the shares of each of the acquiring companies are given as the demerger consideration to the shareholders of the demerging company in proportion to their shareholdings.

The demerging company, and in some cases the acquiring company, shall submit an application to the Finnish Patent and Registration Office regarding a public notice to the company’s creditors. In certain situations the creditors may object to the demerger, and the demerger may lapse. A company can suspend the expiration proceedings by demonstrating that it has brought an action for an affirmation by the court regarding receipt by the creditor of either payment or full security for its receivables. An application for a public notice must be made within one month of the registration of the draft terms of demerger or the demerger will lapse. The registration authority shall publish the notice in the Official Gazette at least three months before the deadline and register the notice ex officio.