NORWAY Law and Practice Contributed by: Ida Marie Windrup, Daniel Jovanovic, Markus Nilssen and Steffen Rogstad, BAHR
described in 4.1 Withholding Tax as an important first step in the structuring of new financing.
tion, and as a result, upstream security and guaran - tees are common features in all types of corporate and acquisition financings. 5.4 Restrictions on the Target Restrictions apply in relation to acquisition financ - ings and the granting of any Financial Assistance by a Norwegian target company (and any subsidiary) in connection with an acquisition of shares, or right to acquire shares, in the Norwegian target or its par - ent company. In short, the financial exposure must not exceed the amounts that the target has available for distribution of dividends to its shareholders. The Financial Assistance must also be granted on com - mercial terms. However, a company may be allowed to obtain Financial Assistance from a Norwegian target company in certain instances and subject to carrying out a so-called “whitewash” procedure. Specifically, the amount limitation does not apply if: the acquiring company is incorporated in an EEA jurisdiction; the acquiring company will form part of the same group of companies as the target following the acquisition; and the correct document procedure is followed. 5.5 Other Restrictions Notwithstanding the exceptions available and across its business, a Norwegian entity (and its board of directors) must always act in the best interest of the relevant company and ensure that there is sufficient corporate benefit. Legal advice should be sought in each case involving Financial Assistance. Under Norwegian insolvency law, there are over - riding claw-back provisions which may, for certain transactions entered into shortly before the opening of insolvency proceedings, being considered objec - tively unfair to other creditors of the insolvent party and also in other circumstances, be invoked by the administrator of the insolvency estate and reversed/ avoided, provided that the debtor was in a distressed financial situation at the time, or if these provisions are deemed necessary to prevent the creditors from being deprived of assets. In Norway, the rules pertaining to claw-back are divid - ed into two primary categories: objective claw-back rules that are applied irrespective of the parties’ inten - tions with the transaction, and subjective claw-back
5. Guarantees and Security 5.1 Assets and Forms of Security
A security package will most commonly include a charge of the shares in the borrower(s) and/or target (depending on the deal) and material subsidiaries, which charges are perfected by way of notice to the company whose shares have been charged. Floating charges over inventory, trade receivables, operating assets, and bank accounts are often granted. Intel - lectual property rights are generally considered as the operating assets of the chargor and may form part of a floating charge. Charges over bank accounts will com - monly be given, as will security over monetary claims/ contract receivables, both perfected through notice to the account bank and/or other debtor. Depending on the business, mortgages over ships or real property may also be created and will be perfected by registra - tion in the relevant asset registry. 5.2 Floating Charges and/or Similar Security Interests Norwegian law does not recognise floating charges covering all assets periodically owned by a debtor, but charges over specific types of assets are avail - able, including the debtor’s inventory, trade receiva - bles and operating assets. These floating charges are perfected by way of registering a standardised charge form with the Norwegian Register of Mortgaged Mov - able Property. Private credit providers in Norway typically insist on the most comprehensive security package available, including fixed charges over specific assets in addi - tion to the aforementioned floating charges. 5.3 Downstream, Upstream and Cross- Stream Guarantees A Norwegian company may provide loans, guarantees and security (“Financial Assistance”) for the benefit of an entity that has a decisive influence over the Nor - wegian obligor or a subsidiary of such legal entity, provided that such Financial Assistance serves the group’s financial interests. This is a practical excep -
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