Corporate Insolvency and Governance Act 2020

33 (1) Part 17 (a company's share capital) is amended as follows. U.K.

(2) In section 549 (exercise by directors of powers to allot shares etc), after subsection (3) insert—

“(3A) Subsection (1) does not apply to anything done for the purposes of a compromise or arrangement sanctioned in accordance with Part 26A (arrangements and reconstructions: companies in financial difficulty).”

(3) In Chapter 3 (allotment of equity securities: existing shareholders' right of pre-emption)—

(a) in section 561 (existing shareholders' right of pre-emption), in subsection (5)(a), for “566” substitute “ 566A ”;

(b) after section 566 insert—

“566A Exception to pre-emption right: companies in financial difficulty

Section 561(1) (existing shareholders' right of pre-emption) does not apply to an allotment of equity securities that is carried out as part of a compromise or arrangement sanctioned in accordance with Part 26A (arrangements and reconstructions: companies in financial difficulty).”

(4) In section 594 (exception to valuation requirement: arrangement with another company), in subsection (6)(a)(i), after “Part 26” insert “ or 26A ”.

(5) In section 616(1) (interpretation of Chapter 7), in paragraph (a) of the definition of “arrangement”, after “Part 26” insert “ or 26A ”.

(6) In section 617 (alteration of share capital of limited company), in subsection (5)(e)(i), after “Part 26” insert “ or 26A ”.

(7) In section 632 (variation of class rights: saving for court's powers under other provisions)—

(a) in the entry for Part 26, after “reconstructions” insert “ : general ”;

(b) after that entry (but before the “or”) insert— “ Part 26A (arrangements and reconstructions: companies in financial difficulty), ”.

(8) In section 641 (circumstances in which a company may reduce its share capital)—

(a) in subsection (2C), in the definition of “scheme”, after “Part 26” insert “ or 26A ”;

(b) in subsection (7), for the words from “the phrase” to “Part 26”” substitute “the phrases “sanctioned by the court under Part 26” and “sanctioned by the court under Part 26A””.

(9) In section 649 (registration of order and statement of capital), in subsection (3)—

(a) in paragraph (a), after “reconstructions” insert “ : general ”;

(b) after that paragraph insert—

“(aa) in the case of a reduction of share capital that forms part of a compromise or arrangement sanctioned by the court under Part 26A (arrangements and reconstructions: companies in financial difficulty)—

(i) in the case of any company other than one to which sub-paragraph (ii) applies, on delivery of the order and statement of capital to the registrar;

(ii) in the case of an overseas company that is not required to register particulars under section 1046, on publication of the order and statement of capital in the Gazette;

(iii) in either case, if the court so orders, on the registration of the order and statement of capital;”;

(c) in paragraph (b), for “any other case” substitute “ any case not falling within paragraph (a) or (aa) ”.