Preference shares if company floats

TJI999

Hi, 
I have some money invested in a company that is considering IPO next year. The money is divided into a small amount of ordinary shares and a majority of preference shares. 
What happens if the company does float? Does my investment just get paid out or can these shares transfer to the "new" company - ie do I have any right or preference to keep these shares?
Thanks in advance for any advice! 

steampowered

Depends on the terms of your preference shares.

It is likely that the preference shares will all get converted into ordinary shares prior to the IPO. Typically, all shares need to become ordinary shares before a listing. If that is the case you will end up holding all listed ordinary shares.

However, many preference shares are redeemable or their only right is to receive a sum of money with an interest rate. If that is the case the company might pay you out in cash prior to the IPO. 

The terms of your preference shares will be set out in the articles of association of the company, or possibly in the shareholders agreement or subscription agreement you signed.

Thrugelmir

Do the preference shares hold any particular rights?