The Lemon Fool

“Absolutely no discussion on these and absolutely no plans to cancel these irredeemable preference shares through a reduction in capital,”

https://www.reuters.com/article/lloyds- ... SL8N1S21CP

I wonder if such a statement is legally binding or if, in the future, if or when they attempt the complete opposite, Lloyds simply reply "there were media reports at the time of an ex-employee making statements that were not true".

Good spot though! I have cash in my "Prefs & Debts" portfolio account looking for a home.

tieresias wrote:I wonder if such a statement is legally binding or if, in the future, if or when they attempt the complete opposite, Lloyds simply reply "there were media reports at the time of an ex-employee making statements that were not true".

Whilst the FCA appears to have little or no power to directly change the Companies Act to clarify the anomalies, they do have strong powers on market abuse. So if Lloyds want to disown a statement, they have to do it sooner rather than later to avoid a false market in the shares.

It would clearly be market abuse if Lloyds had discussed this - so I think we can reasonably assume they haven't. It would also be if they did have plans, so again I assume they haven't. But nothing stops them having plans in the future, and that would not be abuse.

PeterGray wrote: But nothing stops them having plans in the future, and that would not be abuse.

The problem will be that if they think they can exploit legal loopholes by making a return of capital at par without a class vote, then it causes the market in their preference shares to collapse just as if they declared themselves insolvent. Lloyds have form for this, the controversial repayment of their Capital Notes being a recent case in point.

PeterGray wrote:It would clearly be market abuse if Lloyds had discussed this - so I think we can reasonably assume they haven't.

I find it hard to believe that Lloyds didn't discuss them though, when the CEO only last week was sent a letter from the FCA about irredeemable preference shares...