LegalPCF Group
Opinion of the Management Board PCF Group S.A.
4 May 20212 pages~5 min full read
PCF Group S.A. is seeking authorization to increase share capital by up to 5% to enhance financial agility for strategic growth.
The Board aims to bypass standard pre-emptive rights to expedite acquisitions of production teams, new studios, and game development entities.
This authorization is limited to a maximum duration of three years, ensuring the measure remains a temporary strategic tool.
The ability to exclude pre-emptive rights is intended to facilitate share-swap transactions and secure the continued involvement of acquired entity owners.
Supervisory Board approval is required for both the exclusion of pre-emptive rights and the determination of share issue prices to ensure shareholder protection.
The proposed capital structure changes are designed to support the company's long-term objectives, including self-publishing expansion and new concept development.
The Management Board of PCF Group S.A. issued this formal opinion in April 2021 to justify a proposed amendment to the company’s articles of association. The primary objective is to authorize the Board to increase the share capital within a designated authorized capital limit and to grant the power to exclude existing shareholders' pre-emptive rights, subject to Supervisory Board approval. This strategic move is designed to provide the company with the financial flexibility and agility required to operate effectively within the highly dynamic global video game industry.
The thesis of the document centers on the necessity of rapid capital mobilization for corporate growth. By bypassing the standard pre-emptive rights process, the Board can more efficiently execute acquisitions of new production teams, launch new studios, or take over existing game development entities. Such flexibility is deemed essential for competing on a global scale, particularly when transactions involve share swaps or require the continued involvement of the acquired entity's original owners. The Board emphasizes that this mechanism will reduce transaction costs and significantly shorten the time required to close strategic deals.
The scope of the authorization is limited to a maximum period of three years and a capital increase not exceeding 5% of the current share capital. This limitation is intended to prevent significant shifts in the company's ownership structure while still supporting strategic goals such as self-publishing expansion and new concept development. Regarding the issue price of new shares, the Board proposes a flexible approach where the price is determined based on prevailing market conditions at the time of issuance, contingent upon the consent of the Supervisory Board to ensure shareholder protection. Ultimately, the Board concludes that these measures are in the best interest of the company and its long-term strategic objectives.
