WHAT IS CAPITAL REDUCTION?Capital Reduction is a financial strategic decision of reducing the nominal value of a company’s shares. The process of reducing a company’s share capital, the amount of money that has been raised from issuing shares to the public, is called capital reduction.NCLT APPROVAL IS NECESSARY FOR CAPITAL REDUCTIONIt is a process carried out by the company to manage its finances and boost shareholder value. National Company Law Tribunal (NCLT) approves the execution of capital reduction by the company which is also governed by Section 66.BURNPUR CEMENT LIMITED CAPITAL REDUCTION SCHEMEThe scheme of capital reduction of Burnpur Cement Limited proposed for the reduction of issued, subscribed and paid-up equity share capital of the Company from ₹ 86,12,43,630 divided into 8,61,24,363 Equity Shares of ₹10 each, fully paid-up, to ₹17,22,48,730 divided into 1,72,24,873; Equity Shares of ₹10each, fully paid-up pursuant to Section 66 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013.Thus , Burnpur Cement Limited has repaid ₹84,40,18,757 to its shareholders through capital reduction. This will help the Burunpur Cement to eliminate excess cash or assets held by the company and has enhanced the value to its shareholders.CONDITIONS APPLICABLE FOR THE ORDER OF CAPITAL REDUCTION BY NCLT· NCLT Kolkata held that the sanction not to affect any action pending or contemplated by any G... |
