NORWAY Law and Practice Contributed by: Ida Marie Windrup, Kristine Hjertenæs, Markus Nilssen and Daniel Jovanovic, BAHR
should be noted that the practices and require- ments of the various registries may change from time to time, and parties are advised to consult with legal counsel who are current with the latest developments when planning to perfect, release or otherwise manage security interests. 5.2 Form Requirements The charge and mortgage forms referenced in 5.1 Types of Security Commonly Used , shall all be based exclusively on the standardised forms published by the applicable registry. There is limited room to deviate and/or to add additional information other than reference to the underly- ing agreement. These forms shall be in Norwe- gian and need to be signed in original, subject to also other signing requirements. For the floating charges referenced above, a Norwegian organisation number is required, meaning that if the entity is foreign, it will be nec- essary to create a Norwegian-registered foreign company (NUF) in order to charge the asset. 5.3 Registration Process Under Norwegian law, the act to perfect the applicable security, such as a notice of the charge to the relevant company, to the account bank or the security agent, or the registration of the standardised charge forms relating to that movable property, shall be made/delivered promptly or without undue delay. While there are few-to-no formality requirements when it comes to perfection by way of notice, the signing and delivery of the various charge forms and mortgages to the applicable regis- tries shall follow certain signing and formality requirements, such as originals being required. To mitigate any risk when it comes to obtain- ing perfection, the forms may be pre-signed and pre-cleared with the registries in advance
of closing. Given that the practices and require- ments of the various registries may change from time to time, it is advisable to always consult with legal counsel which is up to date with the most recent rules and procedures when perfect- ing security interests. 5.4 Restrictions on Upstream Security A Norwegian company may provide loans, guar- antees and security ( “Financial Assistance” ) for the benefit of an entity that has a decisive influ- ence over the Norwegian obligor or a subsidiary of such legal entity, provided that such Financial Assistance serves the group’s financial interests. This is a very practical exception, and as a result, upstream security and guarantees are common features in all types of corporate and acquisition financings. 5.5 Financial Assistance Restrictions apply in relation to acquisition financings and the granting of any Financial Assistance (as defined in 5.4 Restrictions on Upstream Security ) by a Norwegian target com- pany (and any subsidiary) in connection with an acquisition of shares, or right to acquire shares, in the Norwegian target or any parent company’ shares. 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 commercial terms. However, it 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:
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