Jersey Unreported Judgments

[2008]JRC180

royal court

(Samedi Division)

23^rd October 2008

Before     :

M. C. St. J. Birt, Esq., Deputy Bailiff, and Jurats Le Brocq and Morgan.

IN THE MATTER OF REGUS PLC

AND IN THE MATTER OF PART 12 OF THE COMPANIES (JERSEY) LAW 1991, AS AMENDED

Advocate B. H. Lacey for the Representor.

judgment

the deputy bailiff:

1.        This is an application by Regus Plc ("the Company") for a reduction of Share Capital.  The background is that Regus Group Limited, an English company previously called Regus Group Plc, and to which we shall refer as Old Regus, was formerly the ultimate holding company of an international group of companies providing serviced office accommodation and known as the Regus Group. The ordinary shares of Old Regus were listed on the UK London Stock Exchange. 

2.        Under a scheme of arrangement under the UK Companies Act 2006 between Old Regus and its shareholders, the following arrangements were made:-

(i)        Firstly Old Regus cancelled all of the ordinary shares held by the scheme ordinary shareholders and issued an identical number of ordinary shares to the Company, credited as fully paid. 

(ii)       Secondly the Company then issued ordinary shares credited as fully paid to the scheme ordinary shareholders, on the basis of one ordinary share in the capital of the Company for each ordinary share previously held by each of the scheme ordinary shareholders in the capital of Old Regus. 

(iii)      Thirdly, as a result, the Company became the ultimate holding company of the Regus Group and Old Regus became a directly wholly-owned subsidiary of the company. 

That scheme was sanctioned by the High Court of Justice in England and Wales on 13^th October, and became effective on 14^th October, with the Company's ordinary shares being admitted to the London Stock Exchange on that date.

3.        The issued share capital of the Company following that scheme is £9,509,698.22 comprising of 950,969,822 ordinary shares of 1p each and the amount standing to the credit of the Company share premium account is £573,640,286.43.  That share premium was of course formed by the difference between the nominal value of the issued share capital of the Company and the value of the assets transferred to it when it received the shares in Old Regus.

4.        What the Company now wishes to do is to reduce that share premium by transferring £520 million to a reserve account which can be treated as profits and will be available to the Company for distribution by way of dividend from time to time or for any other purpose for which such a reserve may be applied.  The reasoning behind this is that the Company wishes to maintain the freedom to distribute dividends in the way that Old Regus used to, whereas at present, it will have no profits and it would be dependant upon monies being paid out from the various subsidiaries in order to meet its dividend policy; so there is a clear and discernable purpose.

5.        We remind ourselves of our function under the Law.  We must first of all be satisfied that there is a discernable purpose, secondly that the matter has been fairly explained to shareholders and they are being treated equitably if there is more than one class and thirdly, we must have regard to the interests of creditors. 

6.        So far as the discernable purpose is concerned, we have already said that there is a clear purpose and it has been clearly explained to the shareholders.  As to the interests of the shareholders, this is one of those cases where the actual resolution was passed before the scheme was put into effect, so it was passed by the only two registered shareholders of the Company at that time.  We therefore need to be satisfied that the current shareholders appreciate fully what has happened and that matters have been explained to them.  We are satisfied that they have been.  Firstly, we have had drawn to our attention the relevant part of the information circular which was sent to shareholders in relation to the scheme and there is a section at 2.4 which makes it very clear that there is to be a subsequent reduction of the share capital in the Company as is proposed today.  Secondly the scheme in fact contained a specific resolution which was passed by the scheme shareholders on 24^th December, whereby they approved the reduction of the share capital which would take place in the Company.  So we are quite satisfied the matter has been fully and clearly explained to the scheme shareholders, who form the current shareholders of the Company, and that they approve of it. 

7.        Finally we must consider the position of the creditors.  We have been referred to the list of creditors and they are, in effect, all people who were involved in providing professional services as part of the re-organisation.  The Company has of course only just started to trade and is, in any event, a holding company.  All the creditors have consented; furthermore there will, on any view, be very substantial assets left and the share premium after the proposed reduction will still be £53,640,286.43. 

8.        In the circumstances we are quite satisfied there is no prejudice to creditors and that it is right not to convene them and to apply the relevant provisions of the Article in the law and to approve the scheme. 

9.        Accordingly we approve the reduction and the minute.

Authorities

Companies Act 2006.