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Purchase by a company of its shares
A company may purchase any of its shares (whether or not they are expressed to be redeemable) under CA 2006, sec690 - sec708. The purchase can be by means of a market purchase (PLCs only) or an off-market purchase.
https://www.companylawclub.co.uk/can-a-company-buy-its-own-shares
SSB,
Re: 'So can the Company buy its own shares? No is the answer.'
Have you looked at the voting questions re up and coming AGM, they are available on ii if you have an account, am sure though not 100% certain that should shareholders agree then the company could buy it's own shares.
How might that question be asked not sure, but would provide an answer.
Goldbadger1’s idea is substantially the same as one that I put forward somewhat earlier. In theory it results in a maximum saving at today’s share price of $172million, assuming the Bondholders opt for cash which they will do if the share price is less than $.52 in 2022. Of course it would take some time to buy the required number of number of shares and equally it would take a similarly long time to sell them come 2022 - presumably well prior to the final conversion date, so to speak - if the Bondholders could then be foreseeably certain to opt for cash at par, instead of the shares themselves. The documentation is a little vague but this must essentially be the only real meaning of the offering document.
So can the Company buy its own shares? No is the answer... The general rule under Company Law is that it cannot unless ... – It is empowered to do so under its Articles of Association, and it complies with the current legislation under the Companies Acts, and the Stock Exchange.
From memory, this would require an Extraordinary General Meeting of the Company, and a Special Resolution of its Shareholders to empower and define the programme of share buying for the specific purpose of settling its debt to the Bondholders.
Unusual certainly, but not illegal and with a possible saving of up to $172 million dollars within its purview, perhaps something the Directors should and do have a duty to consider, having regard to their fiduciary duties in that office. The Company would need to consider its possiblity in practice, what would realistically the saving be, and how the shares would be bought and sold. Certainly, not illegal under Company regulations although Stock Exchange Rules may add another dimension.
Obviously market operations of this kind will affect the share price, and temporarily reduce the share capital of the Company so it is tricky but certainly not impossible. With sums of this kind at stake, would the Directors be prepared to sacrifice a little of their dignity to save the Company and its Shareholders a potentially colossal sum of money?