Published: 2017-06-01 08:38:22 CEST
LHV Group
Company Announcement

AS LHV Varahaldus share capital reduction and amendments to the articles of association

On 1 June 2017, AS LHV Group decided to reduce the share capital of its subsidiary company, AS LHV Varahaldus, from 9.3 million euros to 2.7 million euros, i.e. by 6.6 million euros.

The share capital is reduced by cancelling of 6.6 million shares. The share capital reduction results in capital reduction payments to the shareholder (i.e. AS LHV Group, which is the sole shareholder as of 1 June) in the amount of 6.6 million euros within the time period set by the law.

The reason for reducing the share capital lies with managing the capital more efficiently on the level of the consolidation group. AS LHV Varahaldus is not required to keep the share capital in the present size, as the legal requirements are fulfilled as well with the reduced share capital.

„The management of second pillar pension funds started already 15 years ago. To protect customers the state has set up many defensive lines, from requirements for transparency to the Guarantee Fund. Capital requirements have been increasing a lot in recent years. Recent changes in legislation decreased these requirements, but they remained still at a high level for second pillar fund managers. The alteration has to do with the fees of pension funds also falling – for the clients switching funds is now free and management fees are decreasing, declining towards 0.5% as the volume of funds grows. For example, in February the management fee rates of LHV second pillar pension funds dropped by 19% on average,“ Mihkel Oja, the chairman of the management board of AS LHV Varahaldus noted.

The Management Board of the Financial Supervision Authority decided on 15 May to give permission to AS LHV Varahaldus to reduce its share capital by 6.6 million euros.

On 1 June 2017 AS LHV Group also decided to amend the articles of association of AS LHV Varahaldus as follows: i) the minimum capital of the company is EUR 750,000 and the maximum capital is EUR 3,000,000, ii) right to appoint the chairman of the management board lies with the supervisory board, iii) the supervisory board will conclude the contract with a member of the management board in the case, that the contract will be a contract of a member of the management board, iv) if the company has a sole shareholder, the resolutions of the general meeting may be made without following the requirements set in the articles of association for the agenda, notice on calling, the place, procedure and the minutes of the general meeting.

         Priit Rum
         Communication Manager
         Telephone: +372 502 0786