Companies Act 2014 section 424

Power to re-issue redeemed debentures

Section 424 deals with a company's power to re-issue debentures that it has previously redeemed, and the priorities and conditions that apply to such re-issuance.

• A company may re-issue redeemed debentures (either the same ones or new debentures in their place) unless the constitution, a contract, or a company resolution or other act indicates that the debentures are to be cancelled.
• On re-issue, the holder of the debentures enjoys the same priorities as if the debentures had never been redeemed, subject to the protections for certain mortgagees under section 425.
• Debentures deposited as security for advances on current account are not treated as redeemed merely because the company's account ceases to be in debit while the debentures remain deposited.
• The original corresponding provision in the Companies Act 1963 contained stamp duty provisions which have been omitted from this section.