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French to English translations [PRO] Bus/Financial - Finance (general)
French term or phrase:augmentation de capital
Chapter I
Once again ‘augmentation de capital’ has reared its ugly head in a translation concerning stock warrants, and I have been forced into a prolonged exchange arguing that the term ‘capital increase’ does not exist as a set term in US financial English.
This comes up regularly in French/German to English translations of capital market documents. It has been so widely mistranslated as ‘capital increase’, has become so widespread on the internet that it is difficult to convince people without education and professional experience in capital markets (stock brokerage, investment banking, etc.) that the term does not seem to exist in the US. Two very experienced colleagues with MBAs in finance, securities licenses and many years experience in corporate finance concur with me that this may be the single most common mistranslation they deal with. One said he has given up, does not argue forcefully any more, and just says it is incorrect, but if “that’s what the client wants...”, "just don’t say nobody told you", and documents his challenging the term. This mistranslation in contracts or other serious documents could conceivably cause significant material, adverse events for clients.
The term does not appear in the US financial press, in any of the US textbooks or Securities license manuals I have used, does not appear on the Investopedia.com website, or in Ménard’s Dictionnaire de la comptabilité, is not used by the Wall Street Journal, New York Times, Bloomberg or other US finance media.
It is translated by ‘capital increase' in some non-finance-specialized or more casual dictionaries such as granddictionnaire.com, reverso.com, and Freeman’s Dictionnaire Pratique des Mondes de la Finance et de la Bourse, as well as appearing in a Proz.com entry. If you do a google search, you will find it used in documents translated from other languages.
The words capital and increase, of course exist, and sometimes the word ‘capital’ can be used to modify ‘increase’, but it is not a set term, and not used in the same sense as ‘augmentation de capital’.
I had assumed the term might be used in the UK, although working for a couple of years in London and Hong Kong investment banks I can’t remember seeing or hearing it. But the following Wikipedia entry suggests that it is not used in the UK either and suggests that “it is generally a flag of unrefined translation despite its widespread use.” (amen)
‘Capital increase’, predictably, is not a term on Wikipedia either, but when you do a search, you are redirected to this entry:
Seasoned equity offering
From Wikipedia, the free encyclopedia
(Redirected from Capital increase)
"A Seasoned equity offering or secondary equity offering (SEO) is a new equity issue by an already publicly-traded company. Secondary offerings may involve shares sold by existing shareholders (non-dilutive), new shares (dilutive) or both.
The expression 'capital increase' is in widespread use in English-language material published by German corporations. It is a literal translation of the German "Kapitalerhöhung" (augmentation de capital). The expression has extremely little actual currency in either US or UK financial media, in contrast to 'share/stock sale', 'share/stock offering' or 'flotation', which are idiomatic, as well as 'raise/inject capital' or 'equity financing' for example in other contexts.
Because it is essentially not used as such in English, 'capital increase' is generally a flag of unrefined translation despite its widespread use."
When I have asked clients to define in French exactly what they mean by ‘augmentation de capital’, they have invariably described, as the Wikipedia article suggests, a ‘secondary offering’, ‘secondary equity offering’ (SEO) (formal terms), or as we most often say in the US financial vernacular, just ‘issue new equity’. (That this has been my invariable experience, of course doesn’t mean other meanings don’t exist.)
I would particularly appreciate hearing from native speakers of UK and US English, and French or German, who have experience working in stock brokerages, investment banks, private banks/wealth management or similar institutions, hold degrees in corporate finance and securities licenses such as the US Series 7 or their equivalents in other countries, accountants and securities lawyers.
I would like to know what terms you use for ‘augmentation de capital’. And if you think there are implicit understandings in the term as regards ‘rights issues’, dilution, etc. in common use in the French financial community. Can the term be used for just any increase in capital, for example, a parent company boosting a subsidiary’s capitalization, or is it just used to indicate issuing new equity? Are there any other nuances or implications associated with the term as commonly used in the French, Swiss and other financial communities? Thanks!
I do not believe "capital increase" would be an incorrect translation, because it is now widely understood in the French sense of "augmentation de capital" among English speakers in the financial world. Reuters regularly translates "augmentation de capital" and its Italian equivalent, "aumento di capitale", as "capital increase".
However, I think this increasing use of the term in the financial media is a case of an inaccurate translation (or perhaps an "international English" term) becoming a widely accepted term in the English speaking financial world as a result of sheer repetition. Sure, this is not in itself a strong argument not to "move with the trend"; after all, language changes over time, and often for the better.
Yet in this instance I think there are sound reasons to resist change and continue to use what I believe are more precise terms: "rights issue" or "secondary equity offering" (and for the verb phrase "augmenter le capital", I would translate as "issue new equity").
For many native English speakers, the term "capital increase" or "increase in capital" first brings to mind either (a) any way in which a company can increase its share capital (including e.g. retained profits), or (b) any way in which a company can raise funds to support business production (including e.g. bonds). Now, even the narrower concept (a) is broader than what the French usually intend by "augmentation de capital" -- see discussion entries posted by the asker and by wfarkas.
Allow me to digress for a moment:
I think it is the difference between (a) and (b) that has provoked debate about "debt capital" (google it, it's not an oxymoron). TechLawDC claims that increasing debts (e.g. through bonds) cannot increase capital because this would naturally increase liabilities as well as assets. L.J. Wessel van Leeuwen responds that if bonds didn't increase capital, companies would never issue them. Both are correct, because each is working from a different meaning of the word "capital". TechLawDC is referring to capital as net worth or shareholders' equity, but that is not the same as capital in a more general sense of the word (even as used in finance, without talking about "economic" or "real" capital). Financial capital in a more general sense is in fact any form of wealth that a company can use in the process of producing goods or services. In this sense of the word, therefore, an "increase in capital" can indeed come via a bond issue.
Revenons à nos moutons:
In French (and in Italian), a single term, "augmentation de capital" ("aumento di capitale"), has long been used to express both the broader concept "increase in capital" and the narrow concept of issuing new equity. It is not so in English, where "rights issue" and "secondary equity offering" are standard terminology. Therefore, wherever it is clear from the context that "augmentation de capital" is being used in the narrower sense (an issue of stock warrants in this particular case), it is my opinion that it ought to be translated using the standard English "finance textbook" terminology for this narrower concept. As rkillings points out, if the context does not clarify in which sense the original term is being used, then it's better to play it safe and call it "capital increase".
In my view, the only valid argument for preferring "capital increase" over "rights issue" (again, assuming the specific context is known) would be that it is more easily understood by an "international" audience. Here, we'd get ourselves into the debate over whether we should 'fine-tune' language so as to cater to not-quite-fluent readers. All I can say is that while it may sometimes be expedient to do this, it would no longer be pure translation.
I thought I did say thank you to all and that I wish I could have awarded more points to others, but it is buried deep in the comments. But it most certainly bears repeating, THANK YOU ALL AGAIN! This has been far more helpful to me than the usual proz item!
I finished a very busy week and have had time to thoroughly read a day's worth of the Financial Times. What I found was, that the FT uses seemingly half a dozen different locutions including most submitted, most a phrase rather than a set term. However they seem not often to use the formal term 'secondary equity offering' which would be used for example in a prospectus. One interesting item is that they use the term fresh often, as in 'a fresh offering' in addition to the locutions already treated in this entry. "Rights issue ' was also used a lot. I speculate that the fact that so many different variations of locutions are used, is why there is so much confusion because they would most be translated 'augmentation de capital'.
And sure enough, the term 'capital increase' appeared once, but as always, in an article about the French bank BNP.
Further, in the kind of documents where the term is found, since they can involve large amounts of people’s money, this mistranslation could conceivably have legal repercussions or material, adverse consequences.
And, as Will Ladislaw noted: “some native English speaking readers would, as wikipedia claims, find it "unrefined", which could reflect poorly on the company.
Finally, among native speakers, the term would probably be understood as just the sum of its components, that is just any increase in capital. I have in fact seen this happen.
The following quote taken from a recent study highlights how the announcement of new equity can have negative repercussions that would not be communicated to native speakers with the term capital increase.
“We conclude that the information role of security analysts partially explains the negative stock returns surrounding the announcement of new equity.”
3. A broader French definition from French Wikipedia:
"Une augmentation du capital social d'une entreprise peut se faire de plusieurs façons.
Par une opération comptable à l'intérieur du passif du bilan, sous la forme de transformation de réserves en capital. Cela se traduit par une augmentation du nominal des actions ou parts, ou bien par la création de nouvelles actions ("actions gratuites") ou parts distribuées aux porteurs actuels au prorata du nombre de titres qu'ils détiennent déjà.
Par une opération modifiant les droits des apporteurs de capitaux : c'est le cas de la conversion de dettes en capital. Une forme particulière est liée à l'émission préalable d'obligations convertibles ou d'obligations à warrants.
Par apport "en nature" d'actifs divers rémunérés et création de nouvelles actions remises aus apporteurs pour les rémunérer.
Par apport de titres d'autres entreprises (cas des fusions)
Enfin par souscription de nouvelles actions...
This all begs the question, why is the mistranslation ‘capital increase’ so widely used? rkillings forwarded information citing its use in the New York Times. Upon investigation, all of the recent
The 3rd definition (en français ci-dessous) seems to be the definition to which Béatrice Huret-Morton subscribes judging from the comments she contributed. When I have queried clients as to the details of that they mean by ‘augmentation de capital’, they have invariably described what I call ‘issue new equity’ / ‘secondary/seasoned offering’. Which is, of course, not to say that there may be other meanings in other contexts. However, I think ‘augmentation de capital’ for practical purposes indicates new shares for public purchase, and perhaps unlike Europe(?), in the US ‘rights issues’ are usually specifically labeled as such.
1. French legislator's description of the process from Boursilex:
“Le capital social est augmenté, soit par émission d'actions nouvelles, soit par majoration du montant nominal des actions existantes.
L'augmentation de capital s'effectue par l'émission de valeurs mobilières donnant accès immédiat ou à terme, à une quotité du capital de la société.
L'augmentation du capital par majoration du montant nominal des actions n'est décidée qu'avec le consentement unanime des actionnaires, à moins qu'elle ne soit r
We agree that the term is a widespread mistranslation.
The formal term for what French finance professionals usually mean by ‘augmentation de capital’, is ‘secondary offering’, secondary equity offering, ‘seasoned offering’, seasoned equity offering’, also the locution “sell new shares” as in the Daimler translation submitted by Bourth, but in my experience, the most common every day locution used in US finance is “issue new equity”. That this is commonly used in this sense can be easily confirmed by doing a google search. But, of course, as evidenced here, there are a few accurate ways used to render this in English. Those are what I wanted to collect and research by this query.
There seems also to be confusion among French speakers as to what the term means to them. There are 3 French definitions below, 2 of which correspond to the English definition of ‘new equity’ or a ‘secondary/seasoned/new - (share) issue/offering’. The third is broader and includes such other devices for increasing equity as
-transfer of reserves or profits to capital
-special rights issues
-injection of capital into a subsidiary by a parent co.
-etc.
cont'd
1. It does not appear in the major US financial media in that sense except in received communication, always concerning non- US. (and I think also non UK) companies.
2. It does not appear in the English section of Ménard’s Dictionnaire de la Comptabilité et de la Gestion Financière. The translation given for A de C is, curiously, simply ‘financing’.
3. It does not appear on Investopedia.com. (Investopedia also uses the terms ‘secondary shares offering’ or ‘seasoned offering’ for the most common kind of A de C.)
4. It does not appear among the terms of the glossary of the New York Stock Exchange, or vocabulary listed as necessary to know for the US Series 7 Securities license, which also uses the term ‘secondary offering’.
5. It does not appear on the ‘Investorwords.com’ website, which bills itself as “with over 7,500 terms and more than 60,000 links between related terms, the most comprehensive financial glossary you’ll find any where on-line or off.”
6. It does not appear in the 2,000 terms of Pessin & Ross’s “Words of Wall Street” dictionary.
7. It is not used by the United States Securities and Exchanges Commission,
This exchange has been very, very enlightening for me. On the basis of your input, it is clear there is confusion not only as to ‘augmentation de capital’s’ translation into English, but in the understanding of the term among native speakers of French.
The reason I put “please don’t suggest ‘capital increase’” is because I am conclusively certain that-that term is not currently used in US finance. I have recently, for the googolth time, had a proofreader and editor challenge the correct translation.
I have discussed this for years with colleagues, and we all agree that ‘capital increase’ does not exist among native US speakers; and the commentator who posted on wikipedia correct. If you do a search on Wikipedia for the term ‘capital increase’, you will be directed to the link for ‘seasoned equity’ or ‘secondary equity offering.
In addition to our never having heard the term used in what is collectively decades of experience in stock brokerage, investment banking, wealth management, corporate finance, etc., and holding a handful of MBAs in finance, I also posit the term is not used because: (cont’d above)
Capital (in the general broad case) is net worth = assets minus liabilities. If assets and liabilities are increased by the same amount, net worth is not changed. I am not appealing to your intuition or any other untutored "sense" of yours, but to your knowledge of the elementary formalities of balance sheet accounting.
Nonsense! If what you say is correct then what is the purpose of issuing bonds, debentures etc. Is this not to have more capital available to increase the capacity of the company to expand or increase its market share? The result of debt capital is "gearing".
I don't think we have any thing like 'debt capital' in the US and I think TechlawDC is correct. In our lexicon that would be a contradiction in terms. Also, companies do not have to get the consent of shareholders to issue new shares in the US. The sentiment of the shareholders is obviously a very important issue, but I don't think it is required here unless it is written into company terms and conditions, which is unusual (caveat: I'm not a lawyer). Shareholders are frequently enraged by companies that issue (dilutive) new shares against the old shareholders will. I think "Increase in equity shares" would be considered a pleonastic term in the US, one that I have never heard, whereas 'secondary offering', and 'issue new equity/shares' for example, are terms I heard many times every day for years working in investment banks/stock brokerages/wealth management offices.
Issuance of debt instruments per se does not increase capital. This is a fallacy. Assets may be increased, and indeed current assets may be increased, but liabilities increase as well.
I disagree. The company may well have a higher autorized capital than has been suscribed or issued. The authorized capital limits the maximum number of "ordinary shares" that may be issued (a portion or all having been previously suscribed). The company does not have to raise capital by issuing shares and may well decide to opt to raise capital with other financial instruments (such as debentures, preference shares etc.). The issuing of "ordinary shares" may only be made at the approval of present shareholders.
You are looking for ONE term that will define the one from the other… So being a simple man I say if tyou issue from authorised capital you call it "Increase in equity capital" This means that all "ordinary shares" have been issued already and that the company wishes to increase its authorized capital. In the case of other instruments I would just refer it to "increase in debt capital" followed by the intrument of choice. I would call it capital to highlight that it is long term as opposed to short term.
I assume it would by definition be authorized capital, which if there were a new issue would probably imply that extant shares had already been sold out. It would seem pointless to issue new shares if you couldn't even sell the ones you already had out there(?)
Just to throw some spanner in the wheel: Does your A de C refer to augmentation of Authorised Capital or to Issued (or subscribed) capital? The latter referred to as Equity in many instances. As you know equity means more than just shares. So why not then simply refer the A d C to "Increase in equity capital" http://www.investorwords.com/1727/equity_capital.html
The Asian Development Band and the IAD do not use the term to indicate an increase in share capital, they are not joint stock companies. This indicates why it is important that this term be sorted out. There was indeed an article in the New York Times from 1903 that used the term in the sense the Europeans use 'augmentation de capital'.
And the 'problem' as it were, is that it is not back, it has been replaced in the United States for it looks like more than a century by, as Will Ladislaw I think correctly submitted, "rights issue" and 'secondary equity offering". Both of those terms are definitive and appear regularly in the financial press, and are in ALL OF MY FINANCE DICTIONARIES AND GLOSSARIES, and finance textbooks.
I and my two colleagues have advanced degrees in corporate finance and years of experience working in stock brokerages, corporate finance departments and wealth management for decades. These terms are not esoteric, they are used every day in such businesses, and I can assure you the term 'capital increase' in the sense of 'augmentation de capital is not used. This is not what I asked about. That is why I specified "please do not suggest 'capital
If the Asian Development Bank or the Inter-American Development Bank is European, that's news to me. They both do 'capital increases'.
Truth is, as articles in the NYTimes archive attest, 'capital increase' in the European sense was once a common term in the US and Canada -- up until about the first decade of the 20th century. Then it fell out of use here … for a while.
Now it's back.:-)
What's the problem? If you know *how* a capital increase is being accomplished (rights issue, placing, incorporation of reserves, whatever), feel free to say so, but don't insist that everyone ought to shun the general term.
At least it is a term composed of two fairly apposite English words. Think of how the rest of the world's languages have to deal with hedge funds. Try coming up with a *fully accurate* descriptive name for them in any language but English, in 25 words or less. It can't be done.
I work chiefly for a Milan-based brokerage firm and can safely say that "capital increase" is at the very least clearly understood by the company's English-speaking clientele (institutional investors in both the UK and US). Furthermore, Reuters regularly translates "augmentation de capital" and its Italian equivalent, "aumento di capitale", as "capital increase". Nonetheless, my colleague and I have (stubbornly, perhaps) continued to translate the term as either "rights issue" or "secondary equity offering", as in our view, "capital increase" evokes the idea of any way in which a company can raise money (including, e.g. a bond issue). I think the increasing use of the term in the financial media is a case of an inaccurate translation (or perhaps an "international English" term) becoming a widely accepted term in the English speaking financial world as a result of sheer repetition. In my opinion, "capital increase" is not incorrect (at least, not anymore) and might be more easily understood by an "international" audience. However, some native English speaking readers would, as wikipedia claims, find it "unrefined", which could reflect poorly on th
Well, I had started to believe that 'capital increase' might be used in Britain when I saw the link rkillings sent to the FT Lexicon. The FT Lexicon also has links to current articles with the term 'capital increase' in them. Sure enough, just like the New York Times links, they were all to articles about non-UK companies, which makes the Wikipedia article writer (who cannot spell 'flotation') look increasingly correct. The term 'capital increase' is not a term used by English speakers, but a case of mistranslation of 'secondary offering/ new share issue' that has become widespread.
which also use the term ‘secondary offering’.
5. It does not appear on the ‘Investorwords.com’ website, which bills itself as “with over 7,500 terms and more than 60,000 links between related terms, the most comprehensive financial glossary you’ll find any where on-line or off.”
6. It does not appear in the 2,000 terms of Pessin & Ross’s “Words of Wall Street” dictionary.
7. It is not used by the United States Securities and Exchanges Commission, and searches on their site show the term only in received (mis?)translated documents from Germany.
8. A search on the US Financial Industry Regulatory Authority yielded the following message: Your search - "capital increase" - did not match any documents.
HOWEVER, rkillings provides evidence with the FT entry, that the term is used in Britain.
Again, any comment from some one on the ground there in Albion?
rkillings has posted a list of articles purporting to support the premise that 'capital increase' is a term used in US finance. Reviewing the list, the reader will not that ALL of these items are received communication from non-US sources concerning non US companies.
To reiterate, the term ‘capital increase’ does not seem to be used in the US, and seems to have become a very common mistranslation as the Wikipedia commentator noted:
“Because it is essentially not used as such in English, 'capital increase' is generally a flag of unrefined translation despite its widespread use."
I also posit it is not used in English in this sense because:
1. It does not appear in the major US financial media in that sense.
2. It does not appear in the English section of Ménard’s DIctionnaire de la Comptabilité et de la Gestion FInancière. The translation given for A de C is simply ‘financing’.
3. It does not appear on Investopedia.com. (Investopedia uses the term ‘secondary shares offering for the most common kind of A de C.)
4. It does not appear among the terms of the glossary of the New York Stock Exchange, or vocabulary listed as necessary to know for the
The official definition posted below by wfarkas would seem to indicate that the A de C is in fact limited (at least in official terminology if not common usage) to issue of new shares/equity, and does not apply to other devices by which capital is increased (transfer of reserves, undistributed retained earnings, injection of capital by a parent company to a subsidiary, etc).
It is interesting to note that increasing par value an only be legally done with the consent of all shareholders.
Here is the French legislator's description of the process :
Le capital social est augmenté, soit par émission d'actions nouvelles, soit par majoration du montant nominal des actions existantes.
L'augmentation de capital s'effectue par l'émission de valeurs mobilières donnant accès immédiat ou à terme, à une quotité du capital de la société.
L'augmentation du capital par majoration du montant nominal des actions n'est décidée qu'avec le consentement unanime des actionnaires, à moins qu'elle ne soit réalisée par incorporation de réserves, bénéfices ou primes d'émission.
Les actions nouvelles sont émises, soit à leur montant nominal, soit à ce montant majoré d'une prime d'émission.
If you read through the discussion and original post, you will see that I am trying for opinions on whether the term is just meant as the first French definition suggests, as a secondary offering, or includes other devices for increasing capital as also noted perviously in the exchanges.
As you know, « augmentation de capital » is a many-faceted concept.
For instance, depending on the context, it can mean in French :
recapitalisation;
injection de capitaux;
apport de capitaux supplémentaires;
expansion (de la structure) du capital;
etc.
Therefore, before we continue shooting in all directions, it would be helpful to get YOUR OWN DEFINITION of « augmentation de capital ».
Without providing a definition of the concept in the source language or conveying its attributed meaning in a specific source language context, any attempt at translating « augmentation de capital » will remain an educated guess.
Per rkillins entry: I have again repeated the NYT Wall Street Journal search and do not find "capital increase" used once except in an article form 1903.
I think rkillings is correct in noting that the US press tends to always specify the device by which capital is increased.
All of the other incidents of 'capital increase' I saw are from foreign reports.
I'd say this reinforces the position that 'capital increase' is just a term that should be avoided because it is not understood in the US for what is meant.
I think it is part of the new lexicon evolving in continental Europe rooted in poor translation by translators who don't know the correct finance term in ENglish, so they create one.
The example supposed was for a share corporation. It would not apply for an LLC (société à responsabilité limitée), which has members who hold interests (not shareholders who hold shares), or for a limited partnership (LLP) (société en commandite). It would apply only for a share corporation (société anonyme, société par actions).
You have a good point there. It is often the case that I translate the same words differently when I work for an investment bank and when I work for a law firm. As always, it all depends on the context. Cheers.
I think the examples Bourth submitted with corresponding reports from the NYT, Bloomberg and the French language Boursereflex look good. Essentially they don't try to use one term/noun, and certainly not 'capital increase'. "increase its share capital" seems good. Nice work Bourth, Thanks
I think Ms. Huret-Morton was referring to the transactions mentioned in the second French definition of where it mentions that it can be the transfer of funds from reserves or undistributed retained earnings, an in-kind capital contribution, conversion of debt to equity, and in the case of mergers, contributions of the merging company's share.
Thanks TechlawDC. A good point. As far as the sophistication of the readership, it is a contractual document prescribing the terms, conditions and treatment of stock and bond warrants, and the term 'augmentation de capital occurs repeatedly.
Béatrice Huret-Morton, please enlighten me ... and mention some of those different operations (excluding retaining and capitalising retained earnings of course)
The only harm in using "increase in capital" is that it is heedless of the greater significance of "nominal capital" in French law than in U.S. law. E.g. in France a shareholder or etc. is assessable up to the value of his nominal capital. To this criticism I respond that many inexact correspondences of law exist, and many similar examples could be given common to everyday translating practice, especially in procedural law (think criminal procedure). The English-language reader should be sophisticated enough to recognize the fact of inexact correspondence without being told in a translator's note.
Is it possibly the case, that people in the professional finance community have come to use 'augmentation de capital' as only new equity, and the wider community sees it including other kinds of additions to capital, for example in the way that finance people almost never use the term "stock market", whereas the general public uses it commonly?
Also, I am increasingly convinced that the term 'capital increase' exists only, as Wiki says, "a flag of unrefined translation" and does not exist in the US. No one from the UK has weighed in so far as to whether the term is in use there.
I am coming to suspect that the term may be used differently and more broadly by the public, but de facto limited to "secondary offering/new equity issue" among finance professionals.
Actually you present one of the definitions of 'augmentation de capital' that seems to exist. Whereas in the first definition, it seems that only new/secondary issues are involved, in the following definition it includes other ways that capital can be increased:
"Une augmentation du capital social d'une entreprise peut se faire de plusieurs façons.
Par une opération comptable à l'intérieur du passif du bilan, sous la forme de transformation de réserves en capital. Cela se traduit par une augmentation du nominal des actions ou parts, ou bien par la création de nouvelles actions ("actions gratuites") ou parts distribuées aux porteurs actuels au prorata du nombre de titres qu'ils détiennent déjà.
Par une opération modifiant les droits des apporteurs de capitaux : c'est le cas de la conversion de dettes en capital. Une forme particulière est liée à l'émission préalable d'obligations convertibles ou d'obligations à warrants.
Par apport "en nature" d'actifs divers rémunérés et création de nouvelles actions remises aus apporteurs pour les rémunérer.
Par apport de titres d'autres entreprises (cas des fusions)
Enfin par souscription de nouvelles actio
You can have a capital increase without any placing of shares or capital. They are different things. The increase in capital may result from many different operations.
I should have stated that " What you are describing here" IN THE DISCUSSION AREA is ....etc
Believe me I am well qualified to know the difference between the different types of shares etc. Furthermore you are asking for a translation of a term without giving background info. Surely the text that you are translating is defining the augmentation de capital and defining the risks/rights that shareholders/investors are asked to suscribe to. My comment in this discussion was not intended to form part of my suggestion as such but merely a comment on your comment in the disussion.
No, rights issues are related in this way: new equity is most often issued two ways. One, with rights issues where existing shareholders have the right to buy shares in a way that is non-dilutive, with current shareholders given the right to buy new shares, almost always with advantageous conditions. Or 2, a new issue to the general public where any one can buy shares at market price. Type one is considered non-dilutive because the percentage ownership of existing shareholders does not change (*), so it is less controversial.
Conversely, secondary issues (new issues) to the public, can dilute the ownership of the existing shareholders, giving them less control over the company, and probably making their shares worth less. This is a very contentious issue, and frequently leads to disputes, lawsuits, bad feelings, etc.
That is why this issue is so important. Translating a term in a way to infer, or not to infer, that the new capital is dilutive, or non-dilutive, or skirts the issue, is a very, very big deal to shareholders and could cause big problems. That is the reason for the belaboring of this translation.
What you are describing here are RIGHTS ISSUES shares that are issued at nil value to present share holders. They are traded on the Stock exchange for a certain period of time at a market related price (i.e. what investors are prepared to pay).
There are various broad definitions of 'augmentation de capital' on the web in French. Below, once again the dubious English translation of 'capital increase' appears, but seems to suggest it is limited to an issue of new equity. Others include other devices of increasing capital.
"Moyen de financement des entreprises afin notamment de favoriser leur croissance. Les augmentations de capital des sociétés cotées sont le plus souvent ouvertes à tous les investisseurs. Ce type d'opérations consiste à émettre de nouvelles actions, le plus souvent à un prix inférieur au dernier cours coté. La direction fait alors le choix d'un financement via des capitaux propres au détriment d'un financement par endettement.
Pour éviter que les anciens actionnaires ne soient défavorisés lors des augmentations de capital, ils bénéficient d'un droit dit de souscription calculé en fonction du nombre d'actions qu'ils détiennent. S'ils souhaitent participer à cette augmentation de capital, ils utiliseront leurs droits de souscription. Dans le cas contraire, ils pourront les céder aux futurs nouveaux actionnaires."
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augmentation de capital (please don't suggest 'capital increase"
Increase in shares outstanding
Explanation: see this term in financial statements, not sure if it's exactly the same thing
John Detre Canada Works in field Native speaker of: English PRO pts in category: 12
augmentation de capital (please don't suggest 'capital increase"
see text
Explanation: Since you (and others) do not like the term "capital increase" then why not use the term " increase in investment" or any other combination that will describe what is actually sought by the company: " An increase in its long term capital strucure". After all what the company wants is to strengthen its balance sheet by means of attracting long term investment (LTI) as opposed to the more risky short term increase (STI) of overdraft facilities or even term loans (1 year pwards) etc. The investment can be in cash, goodwill, exchange of shares, know-how that then become part of its permanent capital structure.
L.J.Wessel van Leeuwen South Africa Local time: 11:26 Specializes in field Native speaker of: English, Dutch PRO pts in category: 24
Explanation: Just an example, and of a German company at that, and of course the reporters may only be repeating what the German managers told them, but this is how Bloomberg and the NY Times handle the issue, compared to the French translation as augmentation de capital.
the world’s second- largest maker of luxury cars, will SELL 1.95 BILLION EUROS ($2.7 BILLION) OF SHARES to Abu Dhabi’s Aabar Investments PJSC, raising cash as it grapples with the deepening global recession and gaining a long-term shareholder.
Aabar will buy 96.4 million NEW Daimler shares for 20.27 euros apiece, the Stuttgart, Germany-based automaker said in a statement today. The price equates to a 5 percent discount to Friday’s close of 21.34 euros. http://www.bloomberg.com/apps/news?pid=20601087&sid=a0eAzATg...
Daimler, the German maker of Mercedes-Benz cars, said that it would SELL about €1.95 billion worth of NEW shares of stock to Abu Dhabi, making the emirate its largest shareholder at a time of extreme hardship for the global auto industry.
Daimler and Aabar Investments, the Abu Dhabi government’s fund, said in a statement Sunday that the planned $2.7 billion injection of cash “further strengthens Daimler’s sound capital base and offers additional flexibility to invest in new automotive technologies.”
Automakers worldwide are suffering their worst slump in decades.
European sales fell 18.3 percent in February from the level of a year earlier, despite an increase in Germany that resulted from a tax incentive.
Daimler and the Abu Dhabi fund said they would jointly develop low-carbon-emission electric vehicles and research the production of new compound materials for automotive manufacturing.
Under the deal, which has already been approved by the Daimler board, the German company said it would INCREASE ITS SHARE CAPITAL by 10 percent, with 9.1 percent of the new equity going to Aabar. Kuwait had been the largest shareholder, with 6.9 percent. www.nytimes.com/2009/03/23/business/global/23iht-daimler.ht...
Un fonds d'investissement public d'Abu Dhabi, Aabar Investissements, a pris 9,1% du constructeur automobile allemand Daimler en souscrivant à une AUGMENTATION DE CAPITAL pour un montant de 1,95 milliards d'euros, a annoncé dimanche Daimler.
"Aabar est entré comme nouvel actionnaire et détient désormais près de 9,1% du nouveau capital", a indiqué Daimler dans un communiqué. http://www.boursereflex.com/actu/2009/03/22/Un_fonds_d_inves...
xxxBourth Local time: 11:26 Native speaker of: English PRO pts in category: 307
augmentation de capital (please don't suggest 'capital increase"
increase in capital
Explanation: As a very senior finance translator, I see no problem. In the context of a secondary offering, or a conversion of a convertible security, "increase in capital" is fine. (Read any Articles of Incorporation for a French company.) You have not offered a counterexample of a situation or transaction for which "augmentation de capital" would be correct in French but for which "increase in capital" would be misleading in English. Of course "increase in capital" is more vague than "issuance of additional shares" or the like, but it is for the author to decide how vague to be. I guess the issue you, Lindsay, is raising is whether "increase in capital" is substantially more vague than the French author intended. I tend to say "no", or at least "it depends on context".
I agree that if I were reviewing a translation about a secondary offering and the translator translated "augmentation de capital" as "issuance of new shares" I would not change it, because (1) who cares?, (2) in context it is probably more correct than "increase in capital", and (3) I would never finish the review if I descended to this level of nitpicking.
-------------------------------------------------- Note added at 1 hr (2009-09-27 02:54:25 GMT) --------------------------------------------------
... are raising ...
-------------------------------------------------- Note added at 1 hr (2009-09-27 02:57:19 GMT) --------------------------------------------------
Pacific Valley Bank Announces an Increase in Capital and Reports ...
Mar 3, 2009 ... SALINAS, CA, Mar 03 (MARKET WIRE) -- Pacific Valley Bank (OTCBB: PVBK) announced today the completion of a private placement of common stock ... www.reuters.com/.../idUS204615 03-Mar-2009 MW20090303
-------------------------------------------------- Note added at 1 hr (2009-09-27 03:01:28 GMT) --------------------------------------------------
If I were a financial reporter writing about an issuance of a convertible security or convertible private placement that I expected to be converted in the short or medium term, I might well describe it as an "increase in capital" even though misleading, and even though incorrect from the standpoint of accounting principles (as opposed to business sense).
-------------------------------------------------- Note added at 1 hr (2009-09-27 03:08:17 GMT) --------------------------------------------------
In many contexts, "increase in paid-in capital", to make it more clear to a U.S. reader.
-------------------------------------------------- Note added at 10 hrs (2009-09-27 11:48:31 GMT) --------------------------------------------------
Actually, "increase in share capital" is okay in English too. It is not as ambiguous as a naive reader would believe. It is synonymous with "paid-in capital". As to warrants, I believe the practice is that the issuance of the warrant is a capital increasing event, and that if the warrant is exercised there will be an exercise price (less commission etc.) which will accrue to the company as additional share capital, i.e. a second capital increasing event.
TechLawDC United States Works in field Native speaker of: English PRO pts in category: 14
Explanation: My contribution to the educated guesses.
-------------------------------------------------- Note added at 18 hrs (2009-09-27 19:36:57 GMT) --------------------------------------------------
The terms recapitalisation/capital injection are neutral as to the form in which the capital structure in expanded (additional debt/equity, asset revaluation, etc.
xxxwfarkas Canada Local time: 05:26 Specializes in field Native speaker of: English, French PRO pts in category: 62
I do not believe "capital increase" would be an incorrect translation, because it is now widely understood in the French sense of "augmentation de capital" among English speakers in the financial world. Reuters regularly translates "augmentation de capital" and its Italian equivalent, "aumento di capitale", as "capital increase".
However, I think this increasing use of the term in the financial media is a case of an inaccurate translation (or perhaps an "international English" term) becoming a widely accepted term in the English speaking financial world as a result of sheer repetition. Sure, this is not in itself a strong argument not to "move with the trend"; after all, language changes over time, and often for the better.
Yet in this instance I think there are sound reasons to resist change and continue to use what I believe are more precise terms: "rights issue" or "secondary equity offering" (and for the verb phrase "augmenter le capital", I would translate as "issue new equity").
For many native English speakers, the term "capital increase" or "increase in capital" first brings to mind either (a) any way in which a company can increase its share capital (including e.g. retained profits), or (b) any way in which a company can raise funds to support business production (including e.g. bonds). Now, even the narrower concept (a) is broader than what the French usually intend by "augmentation de capital" -- see discussion entries posted by the asker and by wfarkas.
Allow me to digress for a moment:
I think it is the difference between (a) and (b) that has provoked debate about "debt capital" (google it, it's not an oxymoron). TechLawDC claims that increasing debts (e.g. through bonds) cannot increase capital because this would naturally increase liabilities as well as assets. L.J. Wessel van Leeuwen responds that if bonds didn't increase capital, companies would never issue them. Both are correct, because each is working from a different meaning of the word "capital". TechLawDC is referring to capital as net worth or shareholders' equity, but that is not the same as capital in a more general sense of the word (even as used in finance, without talking about "economic" or "real" capital). Financial capital in a more general sense is in fact any form of wealth that a company can use in the process of producing goods or services. In this sense of the word, therefore, an "increase in capital" can indeed come via a bond issue.
Revenons à nos moutons:
In French (and in Italian), a single term, "augmentation de capital" ("aumento di capitale"), has long been used to express both the broader concept "increase in capital" and the narrow concept of issuing new equity. It is not so in English, where "rights issue" and "secondary equity offering" are standard terminology. Therefore, wherever it is clear from the context that "augmentation de capital" is being used in the narrower sense (an issue of stock warrants in this particular case), it is my opinion that it ought to be translated using the standard English "finance textbook" terminology for this narrower concept. As rkillings points out, if the context does not clarify in which sense the original term is being used, then it's better to play it safe and call it "capital increase".
In my view, the only valid argument for preferring "capital increase" over "rights issue" (again, assuming the specific context is known) would be that it is more easily understood by an "international" audience. Here, we'd get ourselves into the debate over whether we should 'fine-tune' language so as to cater to not-quite-fluent readers. All I can say is that while it may sometimes be expedient to do this, it would no longer be pure translation.
Will Ladislaw Italy Local time: 11:26 Specializes in field Native speaker of: English PRO pts in category: 8
Explanation: This term *is* used in the English-language financial press. Don't take my word for it: perform the following exact-phrase searches for "capital increase" on Google using the site: operator:
site:nytimes.com
site:wsj.com
site:ft.com
site:bloomberg.com
site:reuters
I had the same concerns as Joe back in the early '90s, but the world has moved on. This is now a common term in international financial English.
The reasons reporters are using it are also good reasons for translators to use it. To describe a capital increase using another more familiar US or UK term or terms, you have to know just what it entails (rights issue, open issue, secondary offering, private placing, incorporation of reserves, etc., etc.) -- and you may not have that information. This is a higher-level category term otherwise lacking in English, so the case for borrowing it is compelling. Besides, it pretty obviously means an increase in authorised share capital/capital stock, does it not?
For those who wouldn't take my word for it:
wsj.com
Songbird Details Capital Increase - WSJ.com
Sep 24, 2009 ... UK real-estate company Songbird confirmed the details of a capital
increase … The company said it planned to raise £895 million ($1.46 billion)
through share placements -- £620 million of ordinary shares and £275 million in
preference shares
Areva CEO: Sovereign Funds Interested In Capital Increase - WSJ.com
Sep 17, 2009 ... Areva CEO: Sovereign Funds Interested In Capital Increase.
Apollo to Become Infineon Holder Through Capital Increase - WSJ.com
Jul 10, 2009 ... Infineon Technologies said it will launch a rights issue guaranteed
by financial investor Apollo Global Management …
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ft.com
FT.com / Companies / Automobiles - Struggling Continental eyes ...
Jul 20, 2009 ... Capital increase is Continental's second option. ... Continental's
management is eyeing a €1bn ($1.4bn) capital increase, as the German car ...
FT Alphaville » Blog Archive » HSBC 'only needs $20-35bn'
Feb 16, 2009 ... Following investor debate, we wanted to refresh our thesis
regarding a possible capital increase at HSBC. We have extended our analysis of ...
capital increase definition from Financial Times Lexicon
capital increase - definition of capital increase on Financial Times Lexicon. An
increase in the size of a company's equity capital, either through the ...
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nytimes.com
RBS set to announce major capital increase next week - The New York Times
The capital increase, long rumored in the market but frequently dismissed by RBS
management, is a radical U-turn for the second-largest bank after HSBC. ...
(2008/04/18)
France blocks capital increase for EADS - The New York Times
EADS managers raised the possibility of a capital increase in January, citing the
anticipated €10 billion, or $13.36 billion, in research and development ...
(2007/04/10)
UBS offers shares at a steep discount to replenish capital - The New York Times
May 22, 2008 ... The capital increase is the second time that UBS has had to raise
funds since the global credit crisis began last year with the collapse of ...
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bloomberg.com
Switzerland Selling UBS Stake After U.S. Tax Accord (Update4)
Aug 20, 2009 ... The settlement of a U.S. lawsuit that sought data on 52000 UBS
clients and the bank's 3.8 billion-franc capital increase in June …
ADB to Boost Lending After Capital Increase, Nag Says (Update1)
May 2, 2009 ... The Asian Development Bank plans to disburse an additional $10
billion in loans in the next two years to fund infrastructure projects and ...
Petrobras Expects Brazil Government to Increase Stake (Update2)
Sep 4, 2009 ... The capital increase may occur in the first half of next year, ... “The
capital increase is a fundamental element for the company today because we are
already investing more than our Ebitda,” Barbassa said ...
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reuters.com
UPDATE 1-ArcelorMittal down on capital increase talk-traders | … * Rumour of
capital increase * Analysts mostly positive after Wednesday investor day
(2009/09/17)
Pernod Ricard Launches Its € 1bn Capital Increase Through a Rights ...
Apr 15, 2009 ... A fully underwritten rights offering with a subscription ratio of 3
new shares for 17 existing shares and a subscription price of €26.70 per ...
Maersk CEO says group needs no capital increase | Reuters
Mar 16, 2009 ... COPENHAGEN, March 16 (Reuters) - Danish shipping and oil
group AP Moller-Maersk said on Monday it does not need a capital increase.
Well, this term appears in the U.S. Code of Federal Regulations, put there by the SEC in 2000:
"Final Rule:
International Disclosure Standards
Securities and Exchange Commission
17 CFR Parts 210, 228, 229, 230, 239, 240, 249 and 260
[Release Nos. 33-7745; 34-41936; International Series Release No. 1205]
File No. S7-3-99
RIN 3235-AH62
International Disclosure Standards
Agency: Securities and Exchange Commission
Action: Final rule
…
4. Where there is authorized but unissued capital or an undertaking to increase the capital, for example, in connection with warrants, convertible obligations or other outstanding equity-linked securities, or subscription rights granted, indicate: (i) the amount of outstanding equity-linked securities and of such authorized capital or ***capital increase*** and, where appropriate, the duration of the authorization; (ii) the categories of persons having preferential subscription rights for such additional portions of capital; and (iii) the terms, arrangements and procedures for the share issue corresponding to such portions."
And of course the SEC site hosts countless Form 20-F filings from foreign issuers containing the term, so while this term may not be used in "US finance", the US securities regulator seems to have no problem with it.
And one has to question the credibility of the unnamed Wikipedia authors who say the term has "extremely little actual currency in either US or UK financial media, in contrast to 'share/stock sale', 'share/stock offering' or 'floatation'" -- and cannot spell flotation. Flag of unrefined translation indeed.:-)
The problem with ‘capital increase’, if there is one, cannot be that it is mistranslation of ‘augmentation de capital’. The definition of this term in English in the Financial Times’ glossary exactly matches that of its equivalent in French. The term is glossed by the OECD, used by the SEC in the US Code of Federal Regulations, and increasingly widely used by the financial press and news services.
So what is the issue? Why would knowledgeable finance specialists like Joe and Will resist using it? The reason, IMO, is that English is uncomfortable with the level of abstraction common in continental languages. In English we focus on the how, not the what; the specific, rather than the general. If a company has announced a capital increase, we want to know how it intends to raise new money. (If it is merely increasing the capital stock by incorporating retained earnings, which does count as a ‘capital increase’, it is not increasing its equity, and that is usually not newsworthy. Most cases encountered in translation are indeed about raising new money.)
The translation problem in going from the general to the specific is that you need precise details. For example, in 2008 Barclays conducted a £4.5bn capital increase (reported in the UK press as a ‘share sale’ or ‘cash call’) via a placing to Gulf and Asian investors and an open offer to existing shareholders. The placing was private, so it cannot be described as a ‘secondary offering’, which in both the US and UK is understood to be a *public* offering. And an open offer is sufficiently different from a normal rights issue that it goes by a different name. Thus, in this case—and it was a big one—neither ‘rights issue’ nor ‘secondary offering’ would be the right term.
It is legitimate and commendable for a translator to drop from the abstract to the concrete, but you have to know what is actually being done. You cannot just make it up.
In practice, too, some source-language conventions are forced on the translator because it is too cumbersome to avoid them. Take ‘périmètre de consolidation’. The conventional translation, ‘scope of consolidation’, is not a term for which one can find any homegrown usage in the Anglosphere at all. But until someone finds me a concise existing term for the accounting combination of (parent + consolidated subsidiaries + equity-accounted associates), I will go on using it.
rkillings United States Local time: 02:26 Specializes in field Native speaker of: English PRO pts in category: 943
Notes to answerer
Asker: Let me reiterate why we do not use 'capital increase' for an EN-US translation: the term is not understood in the US financial community, and not used by native speakers, it is in our view, clearly a mistranslation that has become widespread. It is especially important to not use it in important documents such as contracts where misunderstanding could have material adverse consequences. I reiterate, the term appears in no US financial dictionaries, is not on investopedia, is not in even the most comprehensive US financial glossaries.
"Scope of consolidation" is another poor translation. The best translation for 'périmètre de consolidation' is usually simply 'consolidation' And this does often trip translators up. Having spent much of my childhood through graduate school in France I would say that 'comfortable with abstraction' is something I would have to characterize with the taurine scatological metaphor. The only use of capital increase on the SEC website is from received mistranslated documents, mostly it looks like from Germany.
These 'Euro-English' mistranslations are not uncommon. I had another one today. An editor who wanted to change 'antidilutive' to 'relutive' because that is the French word. If you google 'relutive' you will find a French definition, no English, and a page of documents about French companies like BNP. Crédit Agricole and EDF Suez, all poorly translated from French. If you don't pay careful attention you will think that relutive is actually a word, which it is not in English.
For me it is helpful to do searches on these dubious terms to see how many hits a term has, and where they are from. If a term seems only or preponderantly used on non-English speaking country websites, there is a good chance it is not the right term.
'Secondary offering' and 'new equity' are very common terms in finance and it behooves financial translators to become familiar with the details and how they relate to the general locution 'increase in capital'. There should be enough information/references in this Proz entry for translators to decide for themselves if they want to use 'capital increase'. If you want your translation sound professional, I wouldn't. I think the Wikipedia guy is right. It is nothing more than a widespread mistranslation.
The translation workplace 
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