Section 338 | Meaning of company replacing another as party to loan relationship

(1)References in this Chapter to one company (“A”) replacing another company (“B”) as a party to a loan relationship include references to A becoming a party to a loan relationship which—

(a)confers rights within subsection (2),

(b)imposes obligations within subsection (2), or

(c)both confers such rights and imposes such obligations.

(2)Rights or obligations are within this subsection if they are equivalent to those of B under a loan relationship to which B has previously ceased to be a party.

(3)For the purposes of subsection (2), A's rights under a creditor relationship are equivalent to rights under another creditor relationship if each set of rights gives the holder of an asset representing the relationship in question—

(a)the same rights against the same persons as to capital, interest and dividends, and

(b)the same remedies to enforce those rights.

(4)For the purposes of subsection (3), any difference in—

(a)the total nominal amounts of the assets representing each relationship,

(b)the form in which they are held, or

(c)the way in which they can be transferred,

is ignored.

(5)For the purposes of subsection (2), A's obligations under a debtor relationship are equivalent to obligations under another debtor relationship if each set of obligations subjects the holder of the liability representing the relationship in question to—

(a)the same obligations to the same persons as to capital, interest and dividends, and

(b)the same remedies to enforce those obligations.

(6)For the purposes of subsection (5), any difference in—

(a)the total nominal amounts of the assets representing the creditor relationship corresponding to each relationship,

(b)the form in which those assets are held, or

(c)the way in which they can be transferred,

is ignored.