A great deal of pro bono activities support the maintaining and developing the rule of law.
Pro bono work fits very well in the business of law firms, since one important aspect of legal practice is to maintain and develop the rule of law, and a great deal of pro bono activities support this purpose. A good example is Crisis Management Initiative, one of Dittmar & Indrenius’ key pro bono clients, whose purpose is to prevent and resolve conflicts and support sustainable peace around the world.
Pro bono activities are an essential part of Dittmar & Indrenius ́ corporate culture and an important element in the professional and personal development of our lawyers.
Q: You defended your doctoral thesis on Mezzanine Finance Instruments at the University of Helsinki this spring. Tell us about the theme of your thesis.
The key theme is the corporate management’s responsibilities towards the creditors in context of the Finnish company law. As to the financial instruments themselves, my focus is on their factual nature and content rather than their pure legal form. Albeit typically structured as debt instruments, mezzanine instruments are often more akin to equity by virtue of their characteristics.
The implementation of the IFRS in Finland has emphasised substance-based evaluation in defining the difference between equity and debt in company accounts. However, from the perspectives of the Finnish company, accounting and tax law, the legal character and status of equity and debt instruments may differ or conflict with one another. Mezzanine finance instruments are a form of hybrid capital. Companies issue mezzanine instruments primarily for the purposes of achieving tax benefits, improving the company ́s solvency and credit ratios as well as facilitating the company ́s capital funding or decreasing capital expenditure. Mezzanine instruments may contribute to the improvement of risk management for companies and their investors as well as increased profits for the investors. They also provide an alternative financing method for companies, their shareholders and other investors by mitigating their conflicting interests.
In my thesis I analyse various types of mezzanine instruments and the structure of the applicable Finnish legal rules. The thesis is published as a book “Välipääomarahoitusinstrumentit” by Talentum.
Q: What are the current hot topics in the Finnish finance markets?
It is a general development in the financial markets in Finland that corporate bonds, mezzanine instruments and other market-based financial instruments are replacing traditional bank financing. A good example of this is the recent acquisition of the Finnish forestry company Kotkamills from OpenGate Capital where we advised the acquirer, MB Funds.
An interesting element of the acquisition was the combination of equity, mezzanine and high-yield bond financing into a single financing package. Although the use of high yield bonds governed by Finnish law as an alternative to bank financing has been relatively rare, case Kotkamills showed that diversity of funding sources and flexibility in creating financing solutions will lead to more efficient outcomes and can bring substantial benefits in capital structure optimising.