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Jersey Unreported Judgments
You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Representation of MES Holdco Ltd [2011] JRC 204 (21 October 2011)
URL: http://www.bailii.org/je/cases/UR/2011/2011_204.html
Cite as: [2011] JRC 204
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[2011]JRC204
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Before : |
M. C. St. J. Birt, Esq., Bailiff, and Jurats Le Cornu and Olsen. |
IN THE MATTER OF REPRESENTATION OF MES HOLDCO LIMITED
AND IN THE MATTER OF PART 12 OF THE COMPANIES (JERSEY) LAW 1991, AS AMENDED.
Advocate M. J. Haines on behalf of the Representor.
judgment
the bailiff:
1. This is an application for reduction of share capital by MES Holdco Limited, which is a company incorporated in Jersey in 1991. It has an authorised share capital of £3,500,000 divided into 3,500,000,000 shares of one penny each. The issued share capital is 2,723,488,794 shares and these were issued at an aggregate share premium of £4,984,315,000.
2. There is only one shareholder. The company is a wholly owned subsidiary of BAE Systems (Holdings) Limited. The company is a holding company and it simply holds shares in two subsidiaries. However, it wishes to be able to distribute the share premium account by way of dividend should this be appropriate. It has passed the necessary special resolution reducing the share premium account to nil by transferring the entire sum in the share premium account to distributable reserves.
3. The test for reduction of share capital is well established in this Court. The Court must consider the interests of both shareholders and creditors. As to the shareholders, they must, if there is more than one class, be treated equally. The matter must be properly explained to them and there must be a discernable purpose. Clearly here, where there is only one shareholder, the first two tests are easily satisfied and we are satisfied also that there is a discernable purpose as we have just described.
4. As to creditors, this is always an important matter in the reduction of share capital but there is only one creditor in this case. That creditor, BAE Systems PLC, has a very substantial debt but it consents to the reduction. In the circumstances we agree that there is no need to apply paragraphs (3)-(5) of Article 62 of the Companies (Jersey) Law 1991.
5. In all the circumstances the Court is satisfied that it is appropriate to approve this reduction. We therefore do so and we approve the minute which has been produced.
Authorities
Companies (Jersey) Law 1991.