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CORPORATIONS ACT 2001

CHAPTER 2J - TRANSACTIONS AFFECTING SHARE CAPITAL  

PART 2J.1 - SHARE CAPITAL REDUCTIONS AND SHARE BUY-BACKS  

Division 2 - Share buy-backs  

SECTION 257B  BUY-BACK PROCEDURE - GENERAL  

257B(1)  [Table of steps required]  


The following table specifies the steps required for, and the sections that apply to, the different types of buy-back.
Proceduresminimum holdingemployee share schemeon-marketequal access schemeselective buy-back
[and sections applied]     
  within 10/12 limitover 10/12 limitwithin 10/12 limitover 10/12 limitwithin 10/12 limitover 10/12 limit 
ordinary resolution [257C]--yes-yes-yes-
special/unanimous resolution [257D]-------yes
lodge offer documents with ASIC [257E]-----yesyesyes
14 days notice [257F]-yesyesyesyesyesyesyes
disclose relevant information when offer made [257G]-----yesyesyes
cancel shares [257H]yesyesyesyesyesyesyesyes
notify cancellation to ASIC [254Y]yesyesyesyesyesyesyesyes

Note: Subsections (2) and (3) of this section explain what an equal access scheme is. The 10/12 limit is the 10% in 12 months limit laid down in subsections (4) and (5). Subsections (6) and (7) of this section explain what an on-market buy-back is. See section 9 for definitions of minimum holding buy-back, employee share scheme buy-back and selective buy-back.

257B(2)  Equal access scheme.  


An equal access scheme is a scheme that satisfies all the following conditions:


(a) the offers under the scheme relate only to ordinary shares;


(b) the offers are to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares;


(c) all of those persons have a reasonable opportunity to accept the offers made to them;


(d) buy-back agreements are not entered into until a specified time for acceptances of offers has closed;


(e) the terms of all the offers are the same.

257B(3)  [Certain differences ignored]  


In applying subsection (2), ignore:


(a) differences in consideration attributable to the fact that the offers relate to shares having different accrued dividend entitlements;


(b) differences in consideration attributable to the fact that the offers relate to shares on which different amounts remain unpaid;


(c) differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares.

257B(4)  10/12 limit.  


The 10/12 limit for a company proposing to make a buy-back is 10% of the smallest number, at any time during the last 12 months, of votes attaching to voting shares of the company.

257B(5)  Exceeding the 10/12 limit.  


A proposed buy-back would exceed the 10/12 limit if the number of votes attaching to:


(a) all the voting shares in the company that have been bought back during the last 12 months; and


(b) the voting shares that will be bought back if the proposed buy-back is made;

would exceed the 10/12 limit.

257B(6)  On-market buy-backs.  

 View history reference

A buy-back is an on-market buy-back if it results from an offer made by a listed corporation on a prescribed financial market in the ordinary course of trading on that market.

257B(7)  [Buy-back in a financial market outside Australia]  

 View history reference

A buy-back by a company (whether listed or not) is also an on-market buy-back if it results from an offer made in the ordinary course of trading in a financial market outside Australia which ASIC declares in writing to be an approved overseas financial market for the purposes of this subsection. A buy-back by a listed company is an on-market buy-back under this subsection only if an offer to buy-back those shares is also made on a prescribed financial market at the same time.

257B(8)  [Declared overseas financial market]  

 View history reference

A declaration under subsection (7) may be subject to conditions. Notice of the making of the declaration must be published in the Gazette.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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