[F1(2A)A company may not reduce its share capital under subsection (1)(a) or (b) as part of a scheme by virtue of which a person, or a person together with its associates, is to acquire all the shares in the company or (where there is more than one class of shares in a company) all the shares of one or more classes, in each case other than shares that are already held by that person or its associates.

(2B)Subsection (2A) does not apply to a scheme under which—

(a)the company is to have a new parent undertaking,

(b)all or substantially all of the members of the company become members of the parent undertaking, and

(c)the members of the company are to hold proportions of the equity share capital of the parent undertaking in the same or substantially the same proportions as they hold the equity share capital of the company.

(2C)In this section—

• “associate” has the meaning given by section 988 (meaning of “associate”), reading references in that section to an offeror as references to the person acquiring the shares in the company;

• “scheme” means a compromise or arrangement sanctioned by the court under Part 26 [F2or 26A] (arrangements and reconstructions).]

(3)[F3Subject to subsections (2) to (2B)], a company may reduce its share capital under this section in any way.

(4)In particular, a company may—

(a)extinguish or reduce the liability on any of its shares in respect of share capital not paid up, or

(b)either with or without extinguishing or reducing liability on any of its shares—

(i)cancel any paid-up share capital that is lost or unrepresented by available assets, or

(ii)repay any paid-up share capital in excess of the company's wants.

(5)A special resolution under this section may not provide for a reduction of share capital to take effect later than the date on which the resolution has effect in accordance with this Chapter.

(6)This Chapter (apart from subsection (5) above) has effect subject to any provision of the company's articles restricting or prohibiting the reduction of the company's share capital.

(7)[F4In subsection (1)(b), section 91(5)(b)(iii), sections 645 to 651 (except in [F5the phrases “sanctioned by the court under Part 26” and “sanctioned by the court under Part 26A”]) and 653(1) “the court” means, in England and Wales, the High Court.]