Cabinet Nouvion

Compound securities and subordinated securities in the new OHADA regulations on commercial companies (Recueil Penant of June 2014 n°887, 2014 p 221)

By François Nouvion
Cabinet Nouvion


On 30 January 2014 a new Companies Uniform Act (“Amended AUSCGIE”) was adopted in 
Ouagadougou by the OHADA Council of Ministers. 

The Amended AUSCGIE has entered into force on May 5 2014 (which is 90 days after publication in the OHADA Official Journal) and brings significant improvements in companies law, through the 
introduction of modern types of securities, notably compound securities “valeurs mobilières 
composées” (in addition to preferred shares, also introduced) and the clarification of the regime of the subordinated securities “valeurs mobilières subordonnées”. 

Compound securities

Before the Amended AUSCGIE, the validity of the issuance of compound securities was debated, which resulted in a very limited practical possibilities to issue complex securities.


A specific Title 2-2 (Book 4 of Part 2) has been inserted in the Amended AUSCGIE to allow the issuance, by stock companies (SA & SAS – listed or not), of compound securities:
- giving access to share capital, or 
- giving entitlement to the allotment of debt securities (Articles 822 and seq).


According to the definition given, a wide variety of compound securities can be created, giving 
immediate or future access to the Company's share capital or allotment of debt securities, such as 
convertible bonds, bonds with warrants, bonds redeemable for shares, etc.. Group compound 
securities are also possible, giving access to the share capital of the subsidiaries/parent of the issuer. 


The regime of the issuance is clearly detailed, including notably a general ability of the extraordinary  shareholders’ meeting and preservation of shareholders' preferential subscription rights. Several mechanisms are also inserted to protect the holders as long as the securities have not been exercised (prohibition/limitation of certain operations on profit sharing, share capital increase, etc). 


Subordinated securities

A clarification and extension of the regime of subordinated securities is also made in order, upon 
issuance of bonds or warrants, to stipulate that they shall be reimbursable only after repayment of all other creditors of the Company (Article 747-1). 

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