A Company want to Redeem 17,00,000 Cumulative Preference Shares of Rs.10/- Each at par without providing Premium on Redeemption on or before 31 march 2012
Company does not adequate Divisble Profits for Redeemption. Company wants to carry out Redeemption by Fresh Issue of Equity Shares.
Company issues 100,000 Equity Shares of Rs.10/- each at Premium of Rs.7/- each equity Shares.
Can Rs.7/- on each Equity Shares be included in Redeemption of Preference Shares.
As per Section 80 of the Companies Act,1956, Is Company required to issue Equity Shares to the Nominal value of the Redeemption of Preference Shares.
So Company Can Issue 100,000 Equity Shares at Rs.17/- each or Company needs to issue 17,00,000 Equity Shares of Rs.10/-(i.e Nominal Value of Redeemption)
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