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.


Procedures minimum holding employee share scheme on-market equal access scheme selective buy-back
[ and sections applied ]
within 10/12 limit over 10/12 limit within 10/12 limit over 10/12 limit within 10/12 limit over 10/12 limit
ordinary resolution [ 257C ] - - yes - yes - yes -
special/unanimous resolution [ 257D ] - - - - - - - yes
lodge offer documents with ASIC [ 257E ] - - - - - yes yes yes
14 days notice [ 257F ] - yes yes yes yes yes yes yes
disclose relevant information when offer made [ 257G ] - - - - - yes yes yes
cancel shares [ 257H ] yes yes yes yes yes yes yes yes
notify cancellation to ASIC [ 254Y ] yes yes yes yes yes yes yes yes

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.  

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]  

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]  

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


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