I’m curious, in which scenarios will a multinational corporation choose to change the nominal amount of share capital for a wholly owned subsidiary (100% ownership level). I have observed this several times in financial statements, more specifically in the group/company overview section, if such is included. That is, if analysing a series of annual reports, from year to year, there is sometimes (not that often) a change in the nominal share capital for specific subsidiaries without a change in the ownership level. In the cases I have checked there was no explanation in the report.
So for an increase, itmust mean that the subsidiary issues additional shares, which the parent entity then buys. In that way, I guess it can be seen as an alternative way of transferring capital in locations where local funding is not a good solution, or an intercompany loan is not attractive, but there may be other reasons? For a decrease, I have a hard time thinking of reasons why a subsidiary would choose to repurchase and cancel its shares?
Any suggestions to when and why multinationals will increase/decrease subsidiary share capital for wholly owned subsdiaries?