Document ID: chunk:federal_register_of_legislation:C2004A04041:section:1990:p183
Version: federal_register_of_legislation:C2004A04041
Segment Type: section
Provision Reference: s 1990 (pt 183/212)
Character Range: 476582–479300

are placed or the negotiations stop for some other reason.

No rights issue or placement during offer period or within 3 months after buy-back

  "206nc. (1) A company shall not:

     (a) during, or within 3 months after the last day of, the offer period of a buy-back offer made by the company; or

     (b) within 3 months after a day on which the company buys back shares;

make or issue a rights offer or invitation, place shares in the company or cause such shares to be placed.

"(2) A contravention of subsection (1) does not affect the validity or enforceability of an act, transaction, agreement, instrument, matter or thing.

"Subdivision P—Effect of Buy-back on Shares

Rights attaching to bought back shares

"206pa. Where a company buys back shares, all rights attached to the shares are suspended:

     (a) so long as the agreement constituting the buy-back is in effect; and

     (b) if the agreement is discharged by performance—until the shares are transferred to the company pursuant to the agreement.

Company not to dispose of bought back shares

"206pb. (1) A company must not sell or otherwise dispose of, or agree to sell or otherwise dispose of, shares that it has bought back or units of such shares.

"(2) An agreement entered into in contravention of subsection (1) is void.

Cancellation of shares after transfer to company

"206pc. (1) Immediately after a transfer to a company of shares in the company is registered by the company:

   (a) the shares are cancelled; and

   (b) all rights attached to the shares are extinguished;

by force of this subsection.

"(2) Where shares are cancelled by force of subsection (1), the company's issued share capital is reduced by the nominal value of the shares, but the company's nominal share capital is not affected.

SCHEDULE 5—continued

Accounting for money spent on buy-back where amount exceeds nominal value of shares

  "206pd. (1) This section applies where a company buys back shares.

  "(2) The company must apply:

     (a) if it has a share premium account—the amounts (if any) standing to the credit of that account; and

  (b) its distributable profits (if any);

in writing off the buy-back premium (if any) and, if paragraph (a) applies, must not so apply any of those profits while an amount is standing to the credit of that account.

"(3) Until the buy-back premium (if any) has been written off in full, the company must not pay, apply or otherwise deal with:

     (a) if paragraph (2) (a) applies—an amount standing to the credit of that account; or

  (b) in any case—any of its distributable profits.

  "(4) In this section:

'buy-back premium' means the amount (if any) by which the total of:

   (a) the amounts