Capitalisation and indebtedness statement – reflection of recent or future changes

The European Securities and Markets Authority has published an updated version of its prospectus Q&As. This states that capitalisation and indebtedness statements may include an additional column to reflect recent or future material changes. The additional column must be consistent with pro forma financial information set out elsewhere in the prospectus (if required) and be understandable.

Recent changes

If a recent change has triggered the requirement to include pro forma financial information an additional column can included in the capitalisation and indebtedness statement. It should be consistent with the pro forma financial information presented elsewhere in the prospectus. Adjustments may be explained by referring to that pro forma financial information.

If the change is complex but does not necessitate the inclusion of pro forma financial information, such information can still be prepared on a voluntary basis and the additional column can be included in the capitalisation and indebtedness statement as set out above.  If an issuer does not wish to prepare pro forma financial information an additional column may still be included in the statement as long as it is comprehensible and easily analysable.

Where the change is straight forward and there is no requirement to prepare pro forma financial information, the inclusion of an extra column is usually allowed.

Future changes

If a future material change triggers the requirement to include pro forma financial information an additional column can included in the capitalisation and indebtedness statement. It should be consistent with the pro forma financial information presented elsewhere in the prospectus. Adjustments may be explained by referring to that pro forma financial information.

Presentation of any potential future change must be factually supportable. If the future outcome is uncertain presenting an additional column reflecting the potential outcome may endanger the comprehensibility and analysability of the prospectus and is therefore normally not allowed.