COMPANIES ACT 1963 - SECT 65 Power to redeem preference shares issued before 5th May, 1959.
65.—(1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, redeem any preference shares issued by it before the 5th day of May, 1959, so, however, that—
( a ) no such shares shall be redeemed unless they are fully paid;
( b ) no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;
( c ) no such shares shall be redeemed at a sum greater than the issue price of such shares;
( d ) the redemption of such shares and the term and the manner thereof must have been authorised by a special resolution of the company;
( e ) notice of the meeting at which the special resolution referred to in paragraph (d) is to be proposed and a copy of the said resolution must be published in Iris Oifigi il and in at least one daily newspaper circulating in the district in which the registered office of the company is situated not less than 14 days and not more than 30 days before the date of the meeting;
( f ) no holder of such shares shall be obliged to accept redemption thereof;
( g ) in the case of a private company the redemption must have been sanctioned by the court.
(2) The powers conferred by this section may be availed of only by means of an offer made to all the holders of the preference shares concerned.
(3) Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund to be called "the capital redemption reserve fund" a sum equal to the nominal amount of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid tip share capital of the company.
(4) Subject to the provisions of this section, the redemption of preference shares under this section may be effected on such terms and in such manner as may be provided by the special resolution referred to in paragraph (d) of subsection (1).
(5) The redemption of preference shares under this section by a company shall not be taken as reducing the amount of the company's authorised share capital.
(6) Subject to subsection (7), where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not for the purposes of any enactments relating to stamp duty be deemed to be increased by the issue of sham in pursuance of this subsection.
(7) Where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of subsection (6) unless the old shares are redeemed within one month after the issue of the new shares.
(8) The capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company in paying up unissued shares of the company (other than redeemable preference shares) to be issued to members of the company as fully paid bonus shares.