Redeemable pre

Failure to redeem – payment defaults and redeemable preference shares

Redeemable Preference Shares (REDP’s) are generally thought of as hybrid securities issued pursuant to the Corporations Act 2001(Cth) (Act) to provide for redemption (cancellation) on the happening of a particular event, or at a party’s election.

Whilst their flexibility makes them an attractive tool, significant legal issues can arise if they cannot be redeemed because a term provides for payment of an amount of money which cannot be repaid or otherwise will cause a breach of the Act. [Read more…]

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