Minority buy-out rights

93. Where a shareholder is entitled to vote on the

exercise of the power set out in paragraph (a) of subsection

(1) of section 92 and the proposed alteration imposes or removes a restriction on the business or activities in which the company may engage, or set out in paragraph (b) or (c) of subsection (1) of section 92, and the shareholder resolved to exercise those powers , and-

(a) the shareholder cast all the votes attached to shares registered in the shareholder’s name and having the same beneficial owner against the exercise of the power ; or

(b) where the resolution to exercise the power was passed under section 144, the shareholder did not sign the resolution in respect of the shares registered in the shareholder’s name and having the same beneficial owner, that shareholder shall be entitled to require the company to purchase those shares in accordance with section 94.

 94. (1) A shareholder of a company who is entitled to require the company to purchase shares by virtue of the provisions of section 93 or section 100 may—

(a) within ten working days of the passing of the resolution at a meeting of shareholders ; or

(b) where the resolution was passed under section 144, before the expiration of ten working days after the date on which notice of the passing of the resolution is given to the shareholder, give a written notice to the company, requiring the company to purchase those shares.

(2) Within twenty working days of receiving a notice under subsection (1), the board shall—

(a) agree to the purchase of the shares by the company ;

(b) arrange for some other person to agree to purchase the shares ;

(c) apply to the court for an order under section 97 or section 98 ; or

(d) arrange before taking the action concerned for the resolution to be rescinded in accordance with section 92 or decide in the appropriate manner not to take the action concerned, as the case may be, and give written notice to the shareholder of the board’s decision under this subsection.

95. (1) Where the board agree under paragraph (a) of subsection (2) of section 94 to the purchase of the shares by the company, it shall, on giving notice under that subsection or within five working days of doing so—

(a) nominate a fair and reasonable price for the shares to be acquired ; and

(b) give notice of the price nominated to the holder of those shares.

(2) The shares are deemed to have been purchased by the company upon receipt by the shareholder of a notice under susection (1).

(3) A shareholder who considers that the price nominated by the board is not fair or reasonable, shall forthwith give a notice of objection to the company.

(4) If within ten working days of giving notice to a shareholder under subsection (1), no objection to the price has been received by the company—

(a) the company shall forthwith pay the price nominated to the shareholder ; and

(b) the shareholder shall forthwith deliver any share certificate in respect of the shares to the company.

(5) If within ten working days of giving notice to a shareholder under subsection (1), an objection to the price has been received by the company, the company shall within five working days—

(a) refer the question as to what amounts to a fair and reasonable price to the auditors of the company ;

(b) pay a provisional price in respect of the shares, equal to the price nominated by the board. Upon payment of the provisional price by the company, the shareholder shall forthwith deliver any share certificate in respect of the shares to the company.

(6) Where a reference is made under paragraph

(a) of subsection 5, the auditor shall expeditiously determine a fair and reasonable price for the shares to be purchased.

(7) Where the price determined under subsection (6)—

(a) exceeds the provisional price already paid, the company shall forthwith pay the balance owing to the shareholder ; or

(b) is less than the provisional price already paid, the shareholder shall forthwith repay the excess to the company.

(8) The auditors may determine the interest on any balance payable or excess to be repaid under subsection (7) at such

rate as they think fit, having regard to whether the provisional price paid was reasonable.

(9) Where the company fails to refer the question to the auditors under paragraph (a) of subsection (5), a shareholder who has given notice of objection under subsection (3) and a shareholder not satisfied with the price as determined under subsection (6), may apply to court to appoint a fit and proper person for the purposes of determining a fair and reasonable price for the shares and the court may appoint such person as it thinks fit. A person so appointed by court may award interest according to the provisions of subsection (8).

(10) A purchase of shares by a company under this section is deemed not to be a distribution for the purposes of section 56, but is deemed to be a distribution for the purposes of subsections (1) and (3) of section 61.

 96. (1) The provisions of section 95 shall apply to the purchase of shares by a person with whom the company has entered into an arrangement for the purchase in accordance with the provisions of paragraph (b) of subsection (2) of section 94, subject to such modifications as may be necessary, and in particular as if references in that section to the board and the company were references to that person.

(2) Every holder of shares that are to be purchased in accordance with the arrangement, shall be indemnified by the company in respect of any loss that may be suffered by such holder due to the failure by the person who has agreed to purchase the shares to purchase them at the price nominated or as determined under subsections (6) or (9) of section 95, as the case may be.

 97. (1) A company to which a notice has been given under section 94 may apply to court for an order exempting it from the obligation to purchase the shares to which the notice relates, on the ground that—

(a) the purchase would be disproportionately damaging to the company ; or

(b) the company cannot reasonably be required to finance the purchase.

(2) On an application made under this section, the court may make an order exempting the company from the obligation to purchase the shares, and may make any other order it thinks fit, including an order—

(a) setting aside a resolution of the shareholders ;

(b) directing the company to take or refrain from taking, any action specified in the order ;

(c) requiring the company to pay compensation to the shareholders affected ; or

(d) that the company be wound up by the court.

(3) The court shall not make an order under subsection

(2) of this section, unless it is satisfied that the company has made reasonable efforts to arrange for another person to purchase the shares in accordance with paragraph (b) of subsection (2) of section 94.

98. (1) Where a notice is given to a company under section 94, and—

(a) the board considers that after the purchase by the company of the shares, the company would fail to satisfy the solvency test ; and

(b) the company has made reasonable efforts to arrange for the shares to be purchased by another person in accordance with the provisions of paragraph (b) of subsection (2) of section 94, but has been unable to do so, the company shall apply to the court for an order exempting it from the obligation to purchase those shares.

(2) The court may on an application made under subsection (1) and where it is satisfied that after the purchase of the shares the company would fail to satisfy the solvency test and the compnay has made reasonable efforts to arrange for the shares to be purchased by another person in accordance with paragraph (b) of subsection (2) of section 94, make—

(a) an order exempting the company from the obligation to purchase the shares ;

(b) an order suspending the obligation to purchase the shares ; or

(c) such other order as it thinks fit, including any order referred to in subsection (2) of section 97.

(3) For the purposes of this section, the stated capital of a company shall not be taken into account in determining whether the company will after the purchase, fail to satisfy the solvency test.

99. (1) A company shall not take any action that would affect the rights attached to shares, unless that action has been approved by a special resolution of each interest group.

(2) For the purposes of this section, the rights attached to a share include—

(a) the rights, privileges, limitations, and conditions attached to the share under this Act or the articles of the company, including voting rights and rights todistributions ;

(b) pre-emptive rights under section 53 ;

(c) the right to have the procedure set out in this section, and any further procedure required by the articles of the company for the amendment or alteration of the articles, observed by the company ; and

(d) the right that a procedure required by the articles of the company for the amendment or alteration of the articles, not be amended or altered.

100. Where an interest group has approved the taking of any action that affects the rights attached to shares and the company becomes entitled to take that action, and— (a) a shareholder who was a member of the interest group cast all the votes attached to the shares registered in that shareholder’s name and having the same beneficial owner against approving the action ; or (b) where the resolution approving the taking of the action was passed under section 144, a shareholder who was a member of the interest group did not sign the resolution in respect of the shares registered in that shareholder’s name and having the same beneficial owner, such shareholder shall be entitled to require the company to purchase those shares in accordance with section 94.

101. The taking of any action by a company affecting the rights attached to shares shall not be invalid by reason only that the action was not approved under section 99.