The Government has published its response to its consultation relating to implementation of the Nuttall Review recommendations on share buybacks. Among the key points, the Government intends to:
• Allow off-market share buybacks to be authorised by ordinary resolution.
• Extend the ability to authorise in advance multiple share buyback contracts to private companies, but limited to buybacks connected to an employees' share scheme.
• Allow private companies to pay for their shares in installments (where the buyback is for the purposes of or pursuant to an employees' share scheme).
• Allow private companies to finance buybacks (for the purposes of or pursuant to an employees' share scheme) out of capital subject to the signing of a solvency statement and special resolution.
The Government intends to amend the Companies Act 2006 by secondary legislation to implement the proposals, to come into force during 2013 and plans to conduct a review three years after enactment.
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