Conversion of convertibles, often simply called conversion (Swedish: konvertering), means the holder of a convertible exchanges their claim on the company for new shares. The exchange takes place at a predetermined conversion price and according to the terms of the convertible. The debt is then replaced by equity.
A conversion increases the number of shares and causes dilution for existing owners. The new shares are registered with Bolagsverket and entered in the share ledger with owner and share number, so the ownership picture is correct afterwards.
A convertible is a loan that can be exchanged for shares in the company.
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The conversion price is the price per share at which a convertible can be exchanged for new shares.
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Dilution means existing owners' stake in the company decreases when new shares are issued.
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A share ledger is a record of a company's shares and who its shareholders are.
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