Capital reduction for prefs

[Wizard]

All

I am keen to understand if I am clear on the position with regards the possibility of a capital reduction at par by issuers of typically discussed prefs. I'll start this off by noting down what I think is the position, but it is highly likely I will have missed some important points so would be grateful if others can correct any wrong understandings or fill in missing gaps.

Please can I request that people resist the temptation to divert this thread into another debate about the legal and / or moral position regarding a capital reduction at par. There are other threads for that discussion.

Aviva / General Accident - public statement that they will not try to utilise a capital reduction until at least 2026
Lloyds - nothing specific in Articles about a class vote, general statement from CFO that they have not discussed a capital reduction
NatWest - appears a class vote of prefs would be required for a capital reduction
Standard Chartered - no clarifying statement
Raven Russia - no clarifying statement
R.E.A. Holdings - no clarifying statement
Santander - no clarity
Bristol & West - no clarity

Thanks for any input.

Terry.

[ChrisNix]

Terry,

Raven Russia has said that its prefs can be cancelled at par, but has proposed a change to the articles to remove this unfettered right.

The directors are big holders of the prefs so this is not altruistic, rather a dose of healthy self interest!

Chris

[tjh290633]

It has just struck me that reduction of capital by cancelling preference (or other) shares can only be done at par, because that is what the capital held in the preference shares is. Any additional value would be assigned somewhere else, like a share premium account.

TJH

[Wizard]

Terry,

Raven Russia has said that its prefs can be cancelled at par, but has proposed a change to the articles to remove this unfettered right.

The directors are big holders of the prefs so this is not altruistic, rather a dose of healthy self interest!

Chris

Thanks for that Chris, I have had a quick look and can't find the statement. Do you have a link to it?

Terry.

[ChrisNix]

Terry,

http://otp.investis.com/clients/uk/rave ... id=1003722

Chris

[Kenny]

The Raven Russia vote is on the 31 May and the large holders of RUSP also hold the majority of the ordinary; so are certainly going to vote in favour of the change in their Articles.

This will mean that there are only three truly irredeemable shares quoted on the London stock Exchange: being NatWest, Raven Russia (RUSP) and Ecclesiastical Insurance albeit Ecclesiastical is based upon their statement and not their Articles.

[Kenny]

All resolutions were passed by Raven Russia on the 31 May, so the RUSP preference shares are now, effectively irredeemable. Nice high and secure yield backed by earnings and the company's cash reserves of over $250m.

[88V8]

I hold RUSP and RUSC, but I'm not sure I'd describe them as secure

Ivor