S.L. 234.42 Art. 24Reduction of issued share capital.

(1) Notwithstanding the provisions of regulation 20(3), where the alteration consists in the reduction of the issued share capital, any such reduction shall not take effect until three months from the date of the publication of the statement to this effect in the

Gazette or on a website maintained by the Registrar and in a daily newspaper showing the date at which the reduction was made and giving such details as are necessary to distinguish the company to which the statement relates: Provided that if a creditor of the company whose debt existed prior to the publication of the statement mentioned in this paragraph objects thereto by sworn application filed within the period of three months reckoned as aforesaid and shows good cause why it should not take effect, the court shall either uphold the objection or allow the reduction on sufficient security being given: Provided further that a reduction in share capital shall be void to the extent that it reduces the capital to less than the minimum prescribed by regulation 15 of these regulations.

(2) The Registrar of Courts shall without delay cause a copy of any sworn application filed under subregulation (1) and of any judgment given thereon to be served on the Registrar for registration.

(3) The total or partial waiving of the unpaid part of the issued shares and the release of the holders of those shares from their obligation to pay up that unpaid part shall, notwithstanding anything contained in the memorandum or articles of a company, in all cases be considered as a reduction in share capital.

(4) Where there are different classes of shares the decision by the general meeting concerning a reduction in the issued share capital shall be subject to a separate vote for each class of shareholders whose rights are affected by the reduction, and for every separate vote taken the same majority shall be required as where the shares are not divided into different classes.

(5) An alteration consisting in the reduction of the issued share capital whose purpose is to offset losses incurred or to include sums of money in a reserve shall take effect immediately on the registration of the resolution concerning such a reduction and the provisions of subregulation (1) relating to the rights granted to creditors of the company shall not apply: Provided that, following this operation, the amount of such reserve is not more than ten per cent of the reduced issued share capital: Provided further that any such reserve shall be used only for offsetting losses incurred or for increasing the issued share capital by the capitalisation of such reserve.

(6) In the cases referred to in subregulation (5) the amounts deriving from the reduction of the issued share capital may not be used for making payments or distributions to shareholders or to discharge shareholders from the obligation to pay calls on their shares: Provided that if the provisions of subregulations (1) and (2) relating to the rights granted to the creditors of the company are followed for the purpose of reducing any sum of money contained in any such reserve, as is referred to in subregulation (5), the amounts deriving therefrom may be used for making payments or distributions to shareholders.

(7) The notice convening the general meeting at which the extraordinary resolution for the reduction of issued share capital is to be taken, shall, specify the purpose expressly and the way in which it is to be carried out.