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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 5 : Fundamental Transactions, Takeovers and Offers

Part A : Approval for certain fundamental transactions

112. Proposals to dispose of all or greater part of assets or undertaking

 

 

1) This section and section 115 do not apply to a proposal to dispose of all or the greater part of the assets or undertaking of a company, if that disposal would constitute a transaction—
a) that is pursuant to or contemplated in a business rescue plan adopted in accordance with Chapter 6;
b) between a wholly-owned subsidiary and its holding company; or
c) between or among—
i) two or more wholly-owned subsidiaries of the same holding company; or
ii) a wholly-owned subsidiary of a holding company, on the one hand, and its holding company and one or more wholly-owned subsidiaries of that holding company, on the other hand.

 

2) A company may not dispose of all or the greater part of its assets or undertaking unless—
a) the disposal has been approved by a special resolution of the shareholders, in accordance with section 115; and
b) the company has satisfied all other requirements set out in section 115, to the extent those requirements are applicable to such a disposal by that company.

 

3) A notice of a shareholders meeting to consider a resolution to approve a disposal contemplated in subsection (2)(a) must—
a) be delivered within the prescribed time, and in the prescribed manner, to each shareholder of the company, subject to section 62 read with any changes required by the context; and
b) include or be accompanied by a written summary of—
i) the precise terms of the transaction or series of transactions, to be considered at the meeting; and
ii) the provisions of sections 115 and 164,

in a manner that satisfies the prescribed standards.

 

4) Any part of the undertaking or assets of a company to be disposed of, as contemplated in this section, must be fairly valued, as calculated in the prescribed manner, as at the date of the proposal, which date must be determined in the prescribed manner.

 

5) A resolution contemplated in subsection (2)(a) is effective only to the extent that it authorises a specific transaction.