ChrisNix wrote:ChrisNix wrote:ChrisNix wrote:
Stockton,
Your understanding of repurchases is accurate.
Regards redemptions you've got things back to front. Under the CA
all prefs are irredeemable unless
prior to their issue the articles state that they
are redeemable subject to the appropriate conditions.
Chris.
ChrisNix wrote:
Stockton,
Sorry if this is confusing.
The Aviva shares were not specified as redeemable prior to their issue nor were they specified as redeemable in the articles, Therefore they were never redeemable (aka irredeemable) under the appropriate part of the CA. Aviva were not relying on that section of the CA in their announcement.
Chris
stockton wrote:Perhaps you should read my post again. Have you not realised that if one accepts your thesis about the meaning of "irredeemable", there is no need to define "redemption" or redeem ?
Stockton,
If you read back through the thread what I said/meant was, "Under the CA
all prefs are irredeemable unless
prior to their issue the articles state that they
are redeemable subject to the appropriate conditions: otherwise
they are not redeemable pursuant to Part 18 Chapter 3 of the CA.
I'm not sure anything turns on the definition of "redemption" or "redeem"?
Chris
Stockton.
It seems we have an agreed position on what irredeemable means in legal terms.
GS's excellent answer to Tara highlights the
separate legal process of capital reduction.
Under the procedures set out in the CA all shares (ords and prefs) in a limited company can have have their capital reduced, and then have that amount paid to the shareholders. If all such capital is returned the shares are cancelled.
However, under 641 (6) this authority is subject to
any provision of the company's articles restricting or prohibiting the reduction of the company's share capital.
Thus the default position for UK listed prefs is that they are reducible/cancellable. Some issues, such as NWBD, benefit from the protection of an article which requires a reduction of their capital to be subject to the prior sanction of 75% of the pref holders as a class.
I think much of the confusion in the market comes from participants tendency to use a shorthand where one size is used to fit all.
If one adopts a binomial classification, the vast majority of UK listed prefs (e.g. LLPC/LLPD) are
freely cancellable, irredeemable shares.
The are quite a few which are
freely cancellable
and redeemable.
A small number (e.g. NWBD) are
restricted cancellation, irredeemable shares.
The two BP prefs are
freely cancellable and irredeemable, but the cancellation has to be made at a premium to the market price.
QED?
Chris