Clause 13

Sections 69B, 69C and 69D give relief from the requirements of section 69 in the circumstances mentioned in this section.(2) The relief given by section 69B or 69C applies where a company issues or has issued shares in circumstances to which either of those sections applies and the issue takes place on or after 27th February 1986.(3) The relief given by section 69D applies only where a company has issued shares in circumstances to which that section applies before the date mentioned in subsection (2).(4) References in sections 69B, 69C and 69D to the issuing company are references to the company issuing the shares as mentioned in subsection (2) or (3).Merger relief69B.—

Subject to section 69C, this section applies where the issuing company has secured at least a 90% equity holding in another company in pursuance of any arrangement providing for the allotment of equity shares in the issuing company on terms that the consideration for the shares allotted is to be provided by the issue or transfer to the issuing company of equity shares in that other company or by the cancellation of any such shares not held by the issuing company.(2) Where the equity shares in the issuing company allotted in pursuance of the arrangement in consideration for the acquisition or cancellation of equity shares in the other company are issued at a premium, section 69 shall not apply to the premiums on those shares.(3) Where the arrangement also provides for the allotment of any shares in the issuing company on terms that the consideration for those shares is to be provided by the issue or transfer to the issuing company of shares, which are non-equity shares, in the other company or by the cancellation of any such shares in that company not held by the issuing company, the relief from section 69 provided by subsection (2) shall extend to any shares in the issuing company allotted on those terms in pursuance of the arrangement.(4) Subject to subsection (5), the issuing company shall be regarded for the purposes of this section as having secured at least a 90% equity holding in another company in pursuance of any such arrangement as is mentioned in subsection (1) if in consequence of any acquisition or cancellation of equity shares in that company in pursuance of that arrangement it holds equity shares in that company (whether all or any of those shares were acquired in pursuance of that arrangement or not) of an aggregate nominal value equal to 90% or more of the nominal value of that company’s equity share capital.(5) Where the equity share capital of the other company in question is divided into different classes of shares this section shall not apply unless the requirements of subsection (1) are satisfied in relation to each of those classes taken separately.(6) Shares held by a company which is the issuing company’s holding company or subsidiary or a subsidiary of the issuing company’s holding company, or by its or their nominees, shall be regarded for the purposes of this section as held by the issuing company.(7) In this section —“equity share capital”, in relation to a company, means its issued share capital excluding any part thereof which neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;“equity shares” means shares comprised in a company’s equity share capital; and“non-equity shares” means shares of any class that is not comprised in a company’s equity share capital.Relief from section 69 in respect of group reconstruction69C.—

This section applies where the issuing company —

is a wholly-owned subsidiary; and

allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to it of shares in another subsidiary (whether wholly-owned or not) of the holding company.(2) Where the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company shall not be required by section 69 to transfer any amount in excess of the minimum premium value to the share premium account.(3) In subsection (2), “the minimum premium value” means the amount, if any, by which the base value of the shares transferred exceeds the aggregate nominal value of the shares allotted in consideration for the transfer.(4) For the purposes of subsection (3), the base value of the shares transferred shall be taken as —

the cost of those shares to the company transferring them; or

the amount at which those shares are stated in that company’s accounting records immediately before the transfer,whichever is the lesser.(5) Section 69B shall not apply in any case to which this section applies.Retrospective relief from section 69 in certain circumstances69D.—

Subject to section 69A(3) and subsection (2) of this section, this section applies where the issuing company has issued at a premium shares which were allotted in pursuance of any arrangement providing for the allotment of shares in the issuing company on terms that the consideration for the shares allotted was to be provided by the issue or transfer to the issuing company of shares in another company or by the cancellation of any shares in that other company not held by the issuing company.(2) The other company in question must either have been at the time of the arrangement a subsidiary of the issuing company or of any company which was then the issuing company’s holding company or have become such a subsidiary on the acquisition or cancellation of its shares in pursuance of the arrangement.(3) Any part of the premiums on the shares so issued which was not transferred to the company’s share premium account in accordance with section 69 shall be treated as if section 69 had never applied to those premiums (and may, accordingly, be disregarded in determining the sum to be included in the company’s share premium account).Provisions supplementary to sections 69B and 69C69E.—

An amount corresponding to any amount representing the premiums or part of the premiums on shares issued by a company which by virtue of section 69B, 69C or 69D is not included in the company’s share premium account may also be disregarded in determining the amount at which any shares or other consideration provided for the shares issued is to be included in the company’s balance-sheet.(2) References in sections 69B, 69C and 69D and in this section (however expressed) to —

the acquisition by any company of shares in another company; and

the issue or allotment of shares to or the transfer of shares to or by any company,include references respectively to the acquisition of any of those shares by and to the issue or allotment or (as the case may require) the transfer of any of those shares to, or by nominees of, that company; and the reference in section 69C(4)(a) to the company transferring the shares therein mentioned shall be construed accordingly.(3) References in sections 69B, 69C and 69D and in this section to the transfer of shares in a company include references to the transfer of a right to be included in the company’s register of members in respect of those shares.(4) In sections 69B and 69D, “arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with section 210 or 306).(5) In sections 69B, 69C and 69D and in this section, “company”, except in references to the issuing company, includes a corporation.Power to make provision extending or restricting relief from section 6969F.—

The Minister may, by regulations, make such provision as appears to him to be appropriate —

for relieving companies from the requirements of section 69 in relation to premiums other than cash premiums; or

for restricting or otherwise modifying any relief from the requirements provided by sections 69A to 69E.(2) Regulations made under this section may make different provision for different cases or classes of cases and may contain such incidental and supplementary provisions as the Minister thinks fit.”.