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Preference shares - Devil in the redemption

S72(4) - redemption of PS shall be out of :-

(a) profits

(b) a fresh issue of shares, or

(c) capital of the co


For (a) after redemption of PS, a sum equal to the amount of the PS redeemed will have to be transferred out of profits into the share capital acc [s72(5)]. (lodge Form s72), so share capital amount maintained.


For (b) - lodge ROA s78 and Form s72. no need to transfter any amount, so share capital is maintained.


For (c) after redemption of PS out of capital, share capital will be reduced by the amount PS redeemed (but is not capital reduction) [s72(3)],

BUT is subject to the requirement (i.e. to lodge solvency statement s113) pursuant to s72(6)(a) & (b) & s72(7) (i.e lodge Form s72)

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