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VCM54220 - VCT: VCT APPROVAL: RECONSTRUCTION INVOLVING THE ISSUE OF SHARES OR SECURITIES: VALUATION OF NEW HOLDING ITA07/S274, S278 & S289 SI2661/2002 REGULATION 9 (2) & (3) A VCT
may hold shares or securities in a company A, which is involved in a scheme of reconstruction. In these circumstances the VCT may acquire new shares or securities in one or more other
companies and may give up or retain the old shares or securities in company A (see VCM55340). Assume the VCT has acquired shares in Company B. Any company A shares or securities that are
retained by the VCT after the scheme of reconstruction and any new shares or securities issued by company B to the VCT are valued for the 15% holding limit condition, the 70% qualifying
holding condition and the 30% or 70% eligible shares condition (see VCM54020 onwards) as follows. The aggregate value of: * the new shares and new securities of company B, and * any company
A shares or securities retained * is calculated immediately after the last of the shares in or securities of company B to be issued in consequence of the scheme of reconstruction is issued,
using the formula below. This value will then be used until the shares or securities fall to be revalued in accordance with ITA07/S278(3) (see VCM54160). The formula is: Nv = Ov x Nmv Nmv +
C Nv = the aggregate value of the new shares and securities of company B and of the company A shares or securities retained; Ov = the aggregate value of the old shares and securities in
company A when they were last valued; Nmv = the aggregate market value of the new shares and securities of company B and of the company A shares or securities retained, immediately after the
last of the shares in or securities of company B to be issued in consequence of the scheme of reconstruction is issued C = the aggregate market value, immediately after the last of the
shares in or securities of company B to be issued in consequence of the scheme of reconstruction is issued, of: (i) any monetary amount, (ii) any monetary amount (without any discount for
postponement of the right to receive payment or any part of it), and (iii) any other consideration of receipt (except the new shares and securities, received by the VCT as consideration for,
or in respect of, the old shares or securities. This same method of valuation is to be used to check that each qualifying holding comprises at least 10% eligible shares as required by
ITA07/S289 (see VCM55080).where Previous page Next page Print this page