Securities subject to conversion
7(1)A scheme satisfies the requirements of this paragraph if it includes—
(a)the issuing by a company of securities subject to conversion, or
(b)the amendment of rights attaching to securities issued by a company such that the securities become securities subject to conversion.
(2)For the purposes of sub-paragraph (1) a company’s securities are securities subject to conversion if—
(a)the rights attached to the securities include provision by virtue of which a holder of such securities is entitled, on the occurrence of an event, to acquire by conversion or exchange shares in the company or another company, and
(b)the occurrence of the event is within the reasonable expectation of the company at the relevant time.
(3)For the purposes of sub-paragraph (2) the relevant time is—
(a)the time when the securities are issued, or
(b)if at the time when the securities are issued the occurrence of the event is not within the company’s reasonable expectation and the rights attaching to the securities are later amended as described in sub-paragraph (1)(b), the time when the rights attaching to the securities are so amended.
(4)In this paragraph “security” has the same meaning as in Part 6 of ICTA.