Aircraft and Shipbuilding Industries Act 1977

35 Compensation for vesting of securities

(1) Compensation for the vesting in a Corporation by virtue of this Part of this Act of the securities of any company shall be satisfied by the issue of government stock, that is to say, stock the principal whereof and the interest whereon shall be charged on the National Loans Fund with recourse to the Consolidated Fund; and in this Part of this Act government stock issued by way of compensation in accordance with this section is referred to as “compensation stock ”.

(2) No compensation shall be payable in respect of securities which, immediately before they become vested in a Corporation by virtue of this Part of this Act, are held by or on behalf of the Crown.

(3) Subject to section 30(4) above, and to subsection (4) below, the amount of compensation due to any person in respect of any securities of a company which are held by him immediately before the date of transfer of that company shall be an amount equal to the base value of those securities less any deduction which is appropriate in his case by virtue of section 39 below.

(4) Where—

(a) on any date after 6th November 1975 but before the relevant vesting date—

(i) a payment is made to a company by virtue of section 1 of the [1949 c. 67.] Civil Aviation Act 1949, or

(ii) financial assistance for a company is provided under Part II of the [1972 c. 63.] Industry Act 1972, and

(b) the Secretary of State makes a special declaration with respect to the payment or assistance before the offer to make the payment or provide the assistance is accepted,

the amount of compensation due to any person in respect of the securities of the company which are held by him immediately before its date of transfer shall be the reduced amount.

(5) Where compensation stock falls to be issued in satisfaction of an amount of compensation due to any person, the amount of stock so issued shall be such as, in the opinion of the Treasury, is equal on the date of issue to that amount of compensation, regard being had (in estimating the value of the compensation stock so issued) to the market value of other government securities at or about that date.

(6) In this section—

• “the reduced amount ” means whichever of the following amounts is specified in a stockholders' representative's notice, namely—

  (a)

  5 per cent. of the amount which would have been payable under subsection (3) above, if the special declaration had not been made, or

  (b)

  the amount which, if the company had not received the payment or assistance mentioned in subsection (4) above, and had in consequence been wound up, the holders of the securities would have received in the winding-up ;

• “special declaration ” means a declaration by the Secretary of State that in his opinion either—

  (a)

  the company would be unable to pay its debts as they fall due without the payment or assistance in question; or

  (b)

  the state of the company's affairs is such that in all the circumstances it is probable that in the foreseeable future it would become unable so to pay them without that payment or assistance ; and

• " stockholders' representative's notice " means a notice served on the Secretary of State within 3 months after the relevant vesting date by the stockholders' representative appointed under section 41 below.

(7) If no stockholders' representative's notice is served, the reduced amount is the amount specified in paragraph (a) of the definition in subsection (6) above.

(8) If any question arises as to—

(a) the amount of compensation payable under subsection (4) above, or

(b) when the company would have been wound up but for the payment or assistance,

it shall be settled by agreement between the Secretary of State and the stockholders' representative or, in default of such agreement, by arbitration under this Act.

(9) Schedule 5 to this Act shall have effect for supplementing the provisions of this section.