[COM 198] Conversion of shares198 

198

(1) Subject to Division 3 of Part 16, a company may convert—

• (a)an ordinary share into a preference share; and
• (b)a preference share into an ordinary share.

(2) A company can convert ordinary shares into preference shares only if the holders’ rights with respect to the following matters are set out in the company’s articles of association or have been otherwise approved by special resolution of the company—

• (a)repayment of capital;
• (b)participation in surplus assets and profits;
• (c)cumulative and noncumulative dividends;
• (d)voting; or/and
• (e)priority of payment of capital and dividends in relation to other shares or classes of preference shares.

(3) A share that is not a redeemable preference share when issued cannot afterwards be converted into a redeemable preference share.