Transport Bill - continued        House of Lords
PART I, AIR TRAFFIC - continued

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Transferee companies: other provisions
Loans.     49. - (1) This section applies if any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is a company falling within subsection (3).
 
      (2) With the Treasury's approval the Secretary of State may make loans of such amounts as he thinks fit to the transferee if when the loans are made it is a company falling within subsection (3).
 
      (3) A company falls within this subsection if it is-
 
 
    (a) a company which is wholly owned by the Crown,
 
    (b) a company which is wholly owned by the CAA, or
 
    (c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).
      (4) If loans are made under this section-
 
 
    (a) they must be repaid to the Secretary of State at such times and by such methods as he may specify in a direction given with the Treasury's approval;
 
    (b) interest on them must be paid to him at such rates and at such times as may be specified in such a direction.
      (5) The Secretary of State must exercise his powers under this section so as to ensure that the aggregate of the amounts outstanding in respect of the principal of loans made under this section does not at any time exceed £1,000 million.
 
      (6) In respect of each financial year the Secretary of State must prepare, in such form as may be specified in a direction given by the Treasury, an account of-
 
 
    (a) sums issued to him out of the National Loans Fund for making loans under this section,
 
    (b) sums received by him under subsection (4), and
 
    (c) how he has disposed of those sums.
      (7) The Secretary of State must send the account to the Comptroller and Auditor General not later than the end of the month of August in the following financial year.
 
      (8) The Comptroller and Auditor General must examine, certify and report on the account and must lay copies of it and of his report before each House of Parliament.
 
Guarantees.     50. - (1) This section applies if any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is a company falling within subsection (3).
 
      (2) The Treasury or the Secretary of State may guarantee the discharge of any financial obligation of the transferee if when the guarantee is made it is a company falling within subsection (3).
 
      (3) A company falls within this subsection if it is-
 
 
    (a) a company which is wholly owned by the Crown,
 
    (b) a company which is wholly owned by the CAA, or
 
    (c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).
      (4) In the case of a financial obligation incurred before the giving of a guarantee, it is immaterial when the obligation was incurred.
 
      (5) A guarantee may be given on such terms and in such manner as the Treasury or the Secretary of State decides.
 
      (6) A guarantee may continue to have effect after the transferee has ceased to be a company falling within subsection (3).
 
      (7) The Treasury may not give a guarantee in relation to a financial obligation which is owed by the transferee to the Secretary of State.
 
      (8) A guarantee may not be given unless the Treasury or the Secretary of State has entered into arrangements under which the transferee will be liable to make payments (including payments of interest) in respect of sums issued in fulfilment of the guarantee.
 
      (9) The Treasury and the Secretary of State must exercise their powers under this section so as to ensure that the aggregate of the amounts of principal in relation to which guarantees are given under this section does not at any time exceed £500 million.
 
      (10) As soon as practicable after giving a guarantee under this section the Treasury or the Secretary of State must lay a statement of the guarantee before each House of Parliament.
 
      (11) As soon as practicable after issuing a sum in fulfilment of a guarantee under this section the Treasury or the Secretary of State must lay a statement relating to the sum before each House of Parliament.
 
      (12) If a payment is not made as required by arrangements under subsection (8), as soon as practicable after the default occurs the Treasury or the Secretary of State (depending on who made the arrangements) must lay a statement of the default before each House of Parliament.
 
Grants.     51. - (1) This section applies if any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is a company falling within subsection (3).
 
      (2) With the Treasury's approval the Secretary of State may make grants towards the transferee's expenditure if when the grants are made it is a company falling within subsection (3).
 
      (3) A company falls within this subsection if it is-
 
 
    (a) a company which is wholly owned by the Crown,
 
    (b) a company which is wholly owned by the CAA, or
 
    (c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).
      (4) Grants may be of such amounts and be made at such times and in such manner as the Secretary of State may determine with the Treasury's approval.
 
      (5) Grants may be made subject to such conditions as the Secretary of State may determine with the Treasury's approval.
 
      (6) Grants may be retained by the transferee after it has ceased to be a company falling within subsection (3) (subject to any condition imposed under subsection (5)).
 
Trustee investments.     52. - (1) This section applies if-
 
 
    (a) any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is a company wholly owned by the Crown,
 
    (b) at a time after the transfer the first condition (set out in subsection (2)) is satisfied, and
 
    (c) the second condition (set out in subsection (3)) is satisfied.
      (2) The first condition is that the transferee is a company whose shares or debentures are included in the Official List, within the meaning of Part IV of the Financial Services Act 1986, in pursuance of that Part.
 
      (3) The second condition is that immediately before its shares or debentures are admitted to the Official List the transferee is wholly owned by the Crown.
 
      (4) If this section applies, subsection (5) has effect for the purpose of applying paragraph 3(b) of Part IV of Schedule 1 to the Trustee Investments Act 1961 (dividends to be paid in each of the five years immediately preceding investment year) in relation to investment in shares or debentures of the transferee in the year of issue or any later year.
 
      (5) The transferee must be taken to have paid a dividend as mentioned in paragraph 3(b)-
 
 
    (a) in every year which precedes the year of issue and which is included in the relevant five years, and
 
    (b) in the year of issue, if it is included in the relevant five years and the transferee does not in fact pay such a dividend in that year.
      (6) For the purposes of this section-
 
 
    (a) the year of issue is the calendar year in which shares in the transferee are first issued in pursuance of section 46;
 
    (b) the relevant five years are the five years immediately preceding the year in which the investment in question is made or proposed to be made.
Shadow directors.     53. - (1) This section applies if-
 
 
    (a) any property, rights or liabilities are transferred under a transfer scheme to a transferee which at the time of the transfer is a company falling within subsection (2), and
 
    (b) at a time after the transfer the condition set out in subsection (3) is satisfied.
      (2) A company falls within this subsection if it is-
 
 
    (a) a company which is wholly owned by the Crown,
 
    (b) a company which is wholly owned by the CAA, or
 
    (c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).
      (3) The condition is that-
 
 
    (a) the transferee continues to be, or becomes and continues to be, a company which is wholly owned by the Crown or a wholly owned subsidiary of such a company, or
 
    (b) the Crown continues to hold any special share provided for under the transferee's articles of association.
      (4) For the purposes of the provisions of the Companies Act 1985 listed in subsection (5) none of the persons listed in subsection (8) is to be regarded as a shadow director of the transferee or of a company associated with the transferee at a time while the condition set out in subsection (3) is satisfied.
 
      (5) The provisions are-
 
 
    (a) section 288 (register of directors);
 
    (b) section 305 (directors' names on correspondence etc);
 
    (c) section 317 (disclosure of interests in contracts);
 
    (d) section 320 (transactions involving directors);
 
    (e) section 323 (prohibition on dealing in share options);
 
    (f) section 324 (disclosure of shareholdings);
 
    (g) section 325 (register of directors' interests);
 
    (h) section 330 (restriction on loans).
      (6) For the purposes of the provisions of the Companies (Northern Ireland) Order 1986 listed in subsection (7) none of the persons listed in subsection (8) is to be regarded as a shadow director of the transferee or of a company associated with the transferee at a time while the condition set out in subsection (3) is satisfied.
 
      (7) The provisions are-
 
 
    (a) Article 296 (register of directors);
 
    (b) Article 313 (directors' names on correspondence etc);
 
    (c) Article 325 (disclosure of interests in contracts);
 
    (d) Article 328 (transactions involving directors);
 
    (e) Article 331 (prohibition on dealing in share options);
 
    (f) Article 332 (disclosure of shareholdings);
 
    (g) Article 333 (register of directors' interests);
 
    (h) Article 338 (restriction on loans).
      (8) The persons are-
 
 
    (a) a Minister of the Crown;
 
    (b) a Northern Ireland Minister;
 
    (c) a nominee of a person falling within paragraph (a) or (b);
 
    (d) a Northern Ireland Department.
      (9) A special share is a share which can be held only by the Crown and which gives the shareholder the right to prevent certain events by withholding consent.
 
      (10) A company is associated with the transferee if the conditions in subsections (11) and (12) are satisfied.
 
      (11) The first condition is that the company is designated for the purposes of this subsection by an order of the Secretary of State.
 
      (12) The second condition is that the company is-
 
 
    (a) wholly owned by the Crown, or
 
    (b) a subsidiary of the transferee.
 
Extinguishment of liabilities
Extinguishment of liabilities.     54. - (1) With the Treasury's consent the Secretary of State may give a direction under this section to the CAA if he thinks that to do so would be appropriate in connection with a transfer scheme which has been or is proposed to be made.
 
      (2) A direction may be given in relation to a company which is wholly owned by the CAA when the direction is given, and it may require the CAA-
 
 
    (a) to release the company from liability in respect of debts which the company owes to the CAA and which are specified in the direction;
 
    (b) to do so at a time when the company is wholly owned by the CAA;
 
    (c) to become a party to such arrangements as the direction may specify with a view to the release taking effect.
      (3) A direction may by virtue of subsection (2)(c) include provision as to instruments, their form and the time they are to be made.
 
      (4) A direction has effect to require the CAA to act in accordance with it even if to do so would not be in furtherance of the CAA's functions arising apart from this section.
 
      (5) If a direction is given the Secretary of State may by order extinguish the CAA's liability in respect of debts which satisfy these conditions-
 
 
    (a) the CAA owes the debts to him,
 
    (b) he thinks they correspond to those specified in the direction, and
 
    (c) they are specified in the order.
      (6) A direction or order may relate to liability for principal only.
 
Securities to be issued.     55. - (1) With the Treasury's consent the Secretary of State may give one or more directions under this section if he thinks that to do so would be appropriate in connection with a direction which has been given under section 54.
 
      (2) A direction under this section may be given to a company falling within subsection (3), and it may require the company-
 
 
    (a) to issue to the appropriate person specified in the direction such securities of the company as the direction specifies, or
 
    (b) to issue to different appropriate persons so specified such securities of the company as the direction specifies.
      (3) These companies fall within this subsection-
 
 
    (a) the company whose liability the direction under section 54 requires to be released;
 
    (b) a company which wholly owns that company;
 
    (c) a company which is a wholly owned subsidiary of a company falling within paragraph (a) or (b).
      (4) These are appropriate persons-
 
 
    (a) the Secretary of State;
 
    (b) the company whose liability the direction under section 54 requires to be released;
 
    (c) a company which wholly owns that company.
      (5) But a company does not fall within subsection (3), and a company is not an appropriate person, unless-
 
 
    (a) it is wholly owned by the Crown when the direction under this section is given, or
 
    (b) it is a wholly owned subsidiary of a company which is wholly owned by the Crown when the direction under this section is given.
      (6) Different directions may be given under this section to the same company; and different directions may be given to different companies.
 
      (7) A company which is given a direction under this section must issue securities in accordance with it.
 
      (8) Securities issued in pursuance of this section must be issued at such times and on such terms as the direction concerned specifies.
 
      (9) Shares issued in pursuance of this section-
 
 
    (a) must be of such nominal value as the direction concerned specifies, and
 
    (b) must be issued as fully paid and treated for the purposes of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 as if they had been paid up by virtue of the payment to the issuing company of their nominal value in cash.
Securities: other provisions.     56. - (1) If a security is issued to a company in pursuance of section 46 or 55, for the purposes of its statutory accounts the value of the security when issued must be taken to have been equal to-
 
 
    (a) its nominal value (if it is a share);
 
    (b) the principal sum payable under it (if it is a debenture).
      (2) The nominal value or principal sum mentioned above must be taken to be accumulated realised profits for the purposes of the company's statutory accounts.
 
      (3) If a direction under section 46 or 55 requires a company to issue a debenture the direction may specify-
 
 
    (a) the principal sum payable under the debenture;
 
    (b) the terms as to the payment of the principal sum;
 
    (c) the terms as to the payment of interest on the principal sum.
      (4) The principal sum payable under the debenture, and the terms as to the payment of it and of interest on it, must be taken to be those so specified.
 
      (5) Statutory accounts are accounts prepared by a company for the purpose of any provision of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 (including group accounts).
 
 
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