This article analyzes the key legal issues in HT5‘s restructuring and return to the public markets. It reviews the hybrid bond reorganization (out-of-moratorium vs. in-moratorium reorganization) and related takeover and reporting questions, as well as the evidentiary approach applied to lifting the moratorium. It further addresses how the shares required for the conversion were made available under Swiss corporate law notwithstanding the naming requirement and examines the merger structure (including dividend timing and the split between merger report and prospectus) as well as the ensuing financial statement and listing requirements.
HT5 AG (formerly Hochdorf Holding AG) had disposed of most of its operating business and entered a moratorium, with a CHF 125 million hybrid bond outstanding. A group of investors saw the opportunity to reposition HT5 as a listed platform and, in spring 2025, took over leadership with the approval of the shareholders at the AGM.
1) Reorganization of the Hybrid Bond
The board of HT5 sought to provide bondholders with a choice between a cash payout reflecting the expected liquidation proceeds and a conversion into equity at a defined ratio of 600 shares per CHF 5,000 denominated bond. While such a structure could in principle have been implemented through a moratorium agreement, this route would have tied the decisive bondholder vote to the very end of the moratorium and would have required subsequent court confirmation. A decision of the bondholders in a bondholders‘ meeting can be made faster. In addition, the substantive and procedural requirements of the moratorium agreement entails inherent uncertainties.
Against this background, the board opted for a reorganization under the bond reorganization regime of the Swiss Code of Obligations as a primary avenue. Art. 1170 CO does not provide for a cash alternative, but only for the conversion into equity.
To allow bondholders to elect between HT5 shares and cash, the bondholders‘ resolution approving the conversion was made conditional upon the launch of a cash repurchase offer. Although Art. 1170 CO does not explicitly address conditional resolutions, none of the refusal grounds under Art. 1177 CO would have warranted refusal merely due to such conditionality, in particular as bondholder protection was not weakened. The competent court accordingly approved the resolutions of the bondholders‘ meeting.
The approval of the conditional conversion raised two further issues. First, it had to be assessed whether, following the resolution, the bonds qualified as equity securities within the meaning of Art. 2 lit. i FinMIA, which would have resulted in the application of takeover law to the repurchase offer. Unlike classical convertible bonds, however, the hybrid bonds did not contain an intrinsic conversion feature. Conversion arose solely from a restructuring measure that depended on the repurchase offer. Accordingly, the repurchase offer remained an offer for straight debt instruments, with a potential change in nature occurring only after or concurrently with its completion. The settlement of the repurchase offer was, inter alia, conditional upon release from the moratorium and the completion of the bond conversion into shares. Second, the question arose whether bondholders became subject to reporting obligations as major shareholders of HT5. This was answered in the affirmative, as the multitude conditional structure does not affect the applicability of the disclosure regime.
In addition to the conversion mechanics, the bondholders‘ resolutions also implemented interest measures expressly contemplated by Art. 1170 (1) items 2 and 3 CO, namely the retroactive waiver of interest foreseen for the years 2021 through 2025 and a permanent reduction by half of the interest accruing as from 21 June 2025 until conversion.
The waived interest concerned deferred, non‑mandatory interest that had not become due and payable and was therefore reflected in equity rather than recognized as a liability. Against this background, the waiver constituted a restructuring measure rather than a settlement of accrued debt. Likewise, the interest reduction affected only future, non‑accrued interest periods.
These measures were confirmed by the Swiss Federal Tax Administration not to trigger Swiss withholding tax or stamp duties, as neither the waiver of non‑due interest claims nor the prospective interest reduction constituted a taxable distribution or interest payment.
2) Getting out of the Moratorium
The objective of the restructuring was to exit the moratorium as reorganized entity. This is possible under Art. 296a DEBA if the reorganization is successfully achieved prior to the expiry of the moratorium, with financial statements evidencing such reorganization.
In the HT5 case, however, release from the moratorium constituted a condition for the conversion of the bonds and the settlement of the cash offer. As a result, the effects of these measures were not yet reflected in the financial statements. A purely formalistic approach could therefore have led to the conclusion that HT5 had not yet been reorganized.
Such an interpretation, however, would not be in line with the purpose of Art. 296a DEBA, which is intended to facilitate out-of-moratorium restructurings, thereby reducing state involvement and associated costs. In HT5, all legally and economically relevant decisions required for the reorganization had either already been taken or were manifestly in the decision-makers‘ interest to the extent that implementation was beyond doubt.
The court accepted pro-forma financial statements illustrating the effects of the restructuring measures as sufficient evidence, thereby allowing the moratorium to be lifted in line with the statutory objective.
3) Making Available the Necessary Shares for the Bond Conversion
A further complexity concerned the availability of shares for the conversion. Prior to the restructuring, HT5‘s share capital consisted of 2,151,757 shares with a nominal value of CHF 10.00 each. The bond conversion required the issuance of a total of 14,289,000 new shares.
The primary difficulty arose from Art. 634a (3) CO, which requires that any person contributing by way of set-off be named in the articles of association. In the context of publicly held bonds settled through the banking system, this requirement is practically incompatible with anonymous settlement mechanics. The commercial register did not accept generic descriptions such as “the bondholders of HT5“, nor intermediary structures involving a bank aggregating bonds prior to contribution.
A solution involving conditional capital with a reduced nominal value, combined with a conditional reduction of the existing nominal value to re-establish a single class of shares, was examined. While feasible in principle, the statutory limitation of conditional capital to 50 % of the share capital rendered this approach insufficient. The Federal Commercial Register did not permit creating an additional conditional capital within the capital band, despite the absence of a statutory limitation capturing both the capital band and the conditional capital.
Ultimately, the solution implemented consisted in reducing the nominal value of all shares to CHF 0.01, with major shareholders contributing capital and making the required shares available for the bond conversion. While workable, this approach highlights the tension between the formal requirements of the revised corporate law and the operational realities of capital‑markets‑based restructurings.
4) Merger of the Companies
Following the restructuring, HT5 and CENTIEL SA agreed to combine in a statutory merger with HT5 as surviving entity. A particular issue arose from the agreement that CENTIEL SA would distribute a dividend of CHF 10 million between signing of the merger agreement on 11 March 2026 and shareholder approval on 13 April 2026. The merger was based on financial statements of CENTIEL SA as of 31 December 2025.
This constellation raised the question whether an interim report under Art. 11 MA was required, as the dividend could be viewed as a significant change in the assets of CENTIEL SA. However, Art. 11 MA is intended to address unforeseen changes affecting the informational basis if the shareholders‘ decision. Where a distribution has been planned from the outset, fully reflected in the exchange ratio and precisely quantifiable, no informational deficit arises and no interim report is required. Otherwise, any dividend shortly before a merger would become impracticable and jeopardize transactions where a merger partner should come in cash-light.
A further strategic decision concerned the documentation. Although a prospectus may be dispensed with if the merger report is drafted to prospectus equivalence under Art. 37 (1) lit. e FINSA, such an approach entails considerable complexity. A prospectus‑equivalent merger report requires an expanded audit, results in non‑standard documentation and increases liability risk. Moreover, such hybrid documentation is not well understood by market participants.
Accordingly, the merger report and the prospectus were deliberately separated. In this context, the question arose whether the prospectus had to be made available to the shareholders resolving on the merger. This was denied, as merger law exhaustively defines the information required for the shareholders‘ decision.
Pursuant to Art. 700 (3) CO, shareholders must receive all information necessary for their resolutions at the shareholders‘ meeting, and this requirement is fulfilled by the merger documentation mandated by the Merger Act.
5) Financial Statement and Listing Requirements
A central question concerned the financial statements required for the transaction. The stock exchange and SIX Exchange Regulation accepted that three years of audited financial statements of CENTIEL SA prepared in an accepted accounting standard were sufficient. CENTIEL SA was regarded as the entity effectively entering the public market, with its financials forming the relevant basis.
This approach had two consequences. First, no additional structural change was deemed to trigger supplementary or pro‑forma financial statements. Second, CENTIEL SA had to meet the listing requirements applicable to newly listed companies, including free‑float requirements. Whether the latter should strictly apply, given that free float is not required to be maintained throughout the listing, remains open to debate.
6) Conclusion
The HT5 transaction demonstrates that Swiss law already provides the tools needed to restructure, recapitalize and relist a distressed listed company – provided that insolvency law, bondholder mechanisms and corporate law are applied in a coherent and purpose-oriented manner. Rather than stretching the law, the transaction exposes where formalistic interpretations should give way to economic reality. In that sense, the case constitutes less an exception than a blueprint for future capital-markets-driven restructurings.
Matthias Courvoisier (matthias.courvoisier@bakermckenzie.com)
Kiara Sharifi (kiara.sharifi@bakermckenzie.com)