Railways Act 1993

106 Extinguishment of certain liabilities of successor companies

(1) The Secretary of State may by order extinguish all or any of the liabilities of a successor company which is for the time being—

(a) a wholly owned subsidiary of the Board, or

(b) wholly owned by the Crown,

in respect of the principal of such relevant loans as may be specified in the order; and the assets of the National Loans Fund shall accordingly be reduced by amounts corresponding to any liabilities so extinguished.

(2) Where the Secretary of State has made an order under subsection (1) above and he considers it appropriate to do so, he may from time to time give a direction under this subsection to the company whose liabilities are extinguished by the order, or to a company or companies wholly owning the company whose liabilities are so extinguished; and a company to which such a direction is given shall, as a consequence of the making of the order, issue such securities of the company as may be specified or described in the direction—

(a) to the Treasury or the Secretary of State; or

(b) if it is the company whose liabilities are extinguished by the order, to a company or companies wholly owning that company.

(3) For the purposes of any statutory accounts of a company to whom securities are issued by virtue of subsection (2)(b) above, the value at the time of its issue of any such security shall be taken—

(a) in the case of a share, to have been equal to its nominal value; and

(b) in the case of a debenture, to have been equal to the principal sum payable under the debenture,

and such nominal value or principal sum shall be taken in those accounts to be accumulated realised profits.

(4) In subsection (3) above “statutory accounts of a company” means any accounts prepared by the company for the purpose of any provision of the [1985 c. 6.] Companies Act 1985 (including group accounts).

(5) The Secretary of State—

(a) shall not give a direction under subsection (2) above for the issue of securities except at a time when the company whose liability is extinguished by the order or, as the case may be, the company which is directed to issue securities satisfies the condition in subsection (6) below; and

(b) shall not give a direction under paragraph (b) of subsection (2) above except at a time when the company, or each of the companies, to whom the securities are to be issued satisfies that condition.

(6) The condition referred to in subsection (5) above is that the company is for the time being—

(a) a wholly owned subsidiary of the Board; or

(b) wholly owned by the Crown.

(7) Unless the Secretary of State otherwise determines in any particular case, where a company is directed to issue debentures in pursuance of this section—

(a) the aggregate of the principal sums payable under the debentures to which the direction relates shall be equal to the aggregate of the sums the liability to repay which is extinguished by the order; and

(b) the terms as to the payment of the principal sums payable on the debentures to which the direction relates, and as to the payment of interest on those principal sums, shall be the same as the corresponding terms of the loans specified in the order.

(8) For the purposes of subsection (7) above, any express or implied terms of a loan shall be disregarded in so far as they relate to the early discharge of liabilities to make repayments of principal and payments of interest.

(9) Subsections (5) to (7) of section 98 above shall apply for the purposes of this section as they apply for the purposes of that section.

(10) The Secretary of State shall not exercise any power conferred on him by this section except with the consent of the Treasury.

(11) In this section “relevant loan”, in relation to a successor company, means any loan made to the Board under section 20 of the [1962 c. 46.] Transport Act 1962, if and to the extent that the liability to repay that loan is transferred to and vested in that company by virtue of a transfer scheme.

(12) For the purposes of this section the company or companies wholly owning another company are—

(a) any company of which that other is a wholly owned subsidiary, or

(b) any two or more companies which between them hold all the issued securities of that other.