Section 647 | Meaning of certain expressions in section 645

(1)This section applies for the purposes of section 645.

(2)“Mandatorily convertible preference shares” means shares which—

(a)represent the creditor relationship mentioned in section 645(2),

(b)are not qualifying ordinary shares, and

(c)are issued upon terms which stipulate that they must be converted into, or exchanged for, qualifying ordinary shares by a relevant time.

(3)In subsection (2) “relevant time” means a time no more than 24 hours after the acquisition of the shares by a person who, immediately before that acquisition, had the creditor relationship.

(4)“Qualifying ordinary shares” means shares in a company which satisfy conditions A and B.

(5)Condition A is that the shares are all or part of the issued share capital (however described) of the company, other than—

(a)capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, or

(b)capital the holders of which have no right to a dividend of any description nor any other right to share in the profits of the company.

(6)Condition B is that the shares—

(a)are listed on a recognised stock exchange, or

(b)are shares in a holding company or a trading company.

(7)In subsection (6) “holding company” and “trading company” have the same meaning as in section 165 of TCGA 1992 (see section 165A of that Act).