LUXEMBOURG Law and Practice Contributed by: Andreas Heinzmann, Hawa Mahamoud and Eva Jean, GSK Stockmann
receivables so transferred. Such transfer of the receiv- able should then be notified to the debtor in accord- ance with Article 1690 of the Luxembourg Civil Code. Subrogation Pursuant to Articles 1249 et seq of the Luxembourg Civil Code, receivables may also be transferred by way of contractual subrogation – ie, a third party will pay to the original lender the amount owed by the debtor and will then be subrogated to all rights and actions the original creditor could have exercised against the debtor prior to the payment by the third party. Novation Also, pursuant to Articles 1271 et seq of the Luxem- bourg Civil Code, receivables may be transferred by way of novation – ie, all parties must consent that a new lender will substitute the original lender and assume its obligations under a new agreement made between the new lender and the debtor. However, pursuant to Article 1278 of the Luxembourg Civil Code, any security interests (such as privileges or mortgages) attached to a former (extinct) claim lapse by virtue of the novation unless the lender has explicitly reserved them to subsist. In addition, follow- ing the general rule provided by Article 1692 of the Luxembourg Civil Code, which applies to accessory security in Luxembourg, the transfer or assignment of receivables includes the transfer of its accessory rights, including any security interests (such as privi- Should the instrument being bought back be a debt instrument listed on a European Union regulated mar- ket or a multilateral trading facility, the provisions of, respectively, Regulation (EU) No 596/2014 on market abuse (ie, an assessment should be made on whether such buy-back would constitute price-sensitive infor- mation that is likely to be considered as inside infor- mation) and rules of the relevant securities exchange on which such debt instrument is listed (if any, such as ensuring equal treatment among bondholders as far as the rights attaching to debt securities held by the latter are concerned) should be observed. leges or mortgages). 3.7 Debt Buyback
The issuer of instruments may also elect to initiate a tender offer addressed to the holders of instruments, offering to purchase back all or part of its outstand- ing debt under specific conditions. Such tender offer is documented in a tender offer memorandum, which sets out the terms and conditions of the tender offer and delineates the period of time for investors to respond. In the case of an issuer of debt instruments admitted to trading on a regulated market who has chosen Luxembourg as its home member state, the provisions of the Law of 11 January 2008 on trans- parency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (the “Transparency Law”) will be applicable with respect to the manner of communicat- ing the terms of the tender offer to investors. Save for the above, and unless otherwise contractu- ally agreed between the parties, there are no restric- tions applicable to debt buy-backs in Luxembourg. 3.8 Public Acquisition Finance The Luxembourg legal framework as regards public finance transactions derives from the provisions of the Law of 19 May 2006 on takeover bids, as amend- ed (the “Takeover Bids Law”), transposing Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 (the “Takeover Bids Direc- tive”). The CSSF is the competent authority for supervis- ing takeover bids, provided that the offeree has its registered office in Luxembourg and its securities are publicly traded on a regulated market in Luxembourg. The procedure to observe while making a public take- over bid derives from the rules set forth in the Takeover Bids Directive and is rather standard throughout the European Union. In a nutshell, the offeror must inform the CSSF of its intention to make a public takeover bid before disclosing such decision to the public. Subse- quently, the offeror must draw up and make public an offer document that will provide information on the takeover offer to the holders of the target company. Such document shall also be communicated to the CSSF for approval within ten working days from the day on which the bid was made public.
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