Conditions for redemption
Capital redemption is the operation whereby the company reimburses shareholders all or parts of the nominal value of their shares, as an advance payment on the proceeds of the future liquidation of the company.
Capital redemption shall be decided by the ordinary general meeting, where it is provided for in the articles of association.
In case the articles of association are silent, it shall be decided by the extraordinary general meeting.
Any resolution taken on the redemption in violation of this article shall be null.
Shares may be totally or partially redeemed. Shares redeemed shall be referred to as dividend shares.
Redemption shall be achieved by an equal refund for each share of the same class and shall not lead to a capital reduction.
Sums of money used for repayment of shares shall be deducted from profits or from reserves not provided for in the articles of association.
They may be withdrawn neither from legal reserve nor, unless otherwise decided by the extraordinary general meeting, from reserves provided for in the articles of association.
Refund of shares shall not have for effect the reduction of shareholders’ equity to an amount lower than the amount of the stated capital plus non-distributable reserves by law or by the articles of association.
Capital redemption transactions were carried out in violation of articles 654 and 655 of the OHADA Law of 2014.
Rights attached to redeemed shares and reconversion of redeemed shares into capital shares
Shares fully or partially redeemed retain all their rights with the exception, however, of the right to the first dividend provided for in article 145 of the above-mentioned law and to the repayment of the nominal value of the shares that they lose proportionally.
The extraordinary general meeting may decide to reconvert shares fully or partially redeemed into capital shares.
The reconversion decision shall be taken under the conditions of quorum and majority provided for the amendment of the articles of association.
The reconversion of shares shall be carried out by a mandatory levy, up to the redeemed amount of shares to be reconverted, from the portion of profits of one or more fiscal years accruing to these shares after payment for shares partially redeemed, of the first dividend or the interest to which they may give right.
Likewise, the extraordinary general meeting may authorize shareholders, under the same conditions, to repay the company the redeemed amount of their shares plus, if any, the first dividend or interest granted by the articles of association during the elapsed period of the current fiscal year and, possibly, of the previous year.
Decisions provided for in article 658 of the 2014 OHADA Law shall be submitted for ratification at the special meetings of each category of shareholders who have the same rights.
Sums of money levied from profits or paid by shareholders under article 658 of the OHADA Law shall be recorded in a reserve account.
When shares are redeemed in full, a reserve account shall be opened for each of the categories of shares also redeemed.
Where the amount of a reserve account constituted by deductions from company profits is equal to the redeemed amount of shares or the matching class of shares, the reconversion is achieved.
The board of directors or the general director, as the case may be, is authorized to make the necessary changes to the provisions of the articles of association insofar as such amendments materially correspond to the results of the transaction.
Where the reconversion is effected by shareholders’ payments, the board of directors or the general director, as the case may be, is authorized to proceed, no later than at the close of each fiscal year, with the amendment of the articles of association in line with conversions carried out during the said fiscal year.
Partially redeemed shares, whose reconversion into capital shares has been ordered, shall be entitled, for each fiscal year and up to the completion of this reconversion, to the first dividend or interest in lieu thereof, calculated based on the amount paid, but not redeemed for said shares.
Furthermore, shares fully or partially redeemed whose reconversion is effected by deductions from profits shall be entitled, for each fiscal year and up to the final realization of the reconversion, to the first dividend calculated based on the amount, at the close of the immediately preceding fiscal year, of the matching reserve account.
Deliberations conducted and decisions taken and reconversions of shares undertaken in violation of Articles 657, 658, and 659 of the 2014 OHADA Law shall be null.