4

1

The Company may raise capital by—

a

the issue of shares;

b

borrowing on mortgage of the undertaking;

c

borrowing by the issue of debenture stock.

2

Any sums to be raised in accordance with subsection (1), when added to—

a

the sums raised by the issue of existing share capital before the relevant date; and

b

other amounts raised by borrowing and still outstanding on that date;

shall not exceed £40 million.

3

Subject to subsection (4), the Company shall take such steps as may be necessary to ensure that the amounts raised as mentioned in paragraphs (b) and (c) of subsection (1) which are at any time outstanding do not exceed twice the aggregate of—

a

the sums raised by the issue of existing share capital; and

b

the amount of the Company’s reserves.

4

With the consent of the Secretary of State, the Company may raise an additional amount, as mentioned in paragraphs (b) and (c) of subsection (1), not exceeding ten per cent. of the total on the relevant date of the sums and amount specified in paragraphs (a) and (b) of subsection (3).

5

For the purposes of this section—

a

the amount raised by the issue of share capital or debenture stock is the amount raised after taking into account any premiums or discounts; and

b

in the case of any share capital or debenture stock issued for a consideration other than cash the nominal value shall be taken to have been the amount raised by that issue.

6

The Company’s powers of borrowing may be exercised without obtaining a certificate of a justice under section 40 of the Companies Clauses Consolidation Act 18455.

7

Sums to be raised by the Company may be raised by the issue of new ordinary shares or stock or new preference shares or stock or, at the Company’s option, by any of those methods.

8

The Company shall not pay interest on any moneys borrowed or debenture stock issued under this section at a higher rate than seven per cent. per annum or such higher rate as the Secretary of State may from time to time allow:

Provided that the consent of the Secretary of State shall not be required to the payment of interest on moneys borrowed by the Company on mortgage of the undertaking or by the issue of debenture stock at a rate higher than seven per cent. per annum if the rate is a fixed rate and is certified to the Company as being appropriate in the circumstances of the case by—

a

the firm of stockbrokers, being members of a recognised stock exchange as defined in section 16(1) of the Company Securities (Insider Dealing) Act 19856, or the bankers who placed the mortgage or placed or underwrote the issue of debenture stock; or

b

in the case of the raising of money on mortgage, an accountant or firm of accountants being either the duly appointed auditor or auditors of the Company or a person qualified to be so appointed.

9

In this section—

• “the Company’s reserves” means the aggregate of any of the following amounts appearing in the Company’s last audited balance sheet—

  1. a

     any capital reserve;

  2. b

     any sum carried forward in accordance with section 77 of the Third Schedule; and

  3. c

     any amounts standing to the credit of any reserve or contingency fund established and maintained in accordance with section 76 of the Third Schedule;

• “the relevant date” means the date on which the Company exercise the powers mentioned in subsection (1).