Company purchase of own shares
Tim Hague of AFB Accountants in Sherborne has recently concluded advising a client who's directors and shareholders wished to part company, leaving one of the directors owning 100% and having full control.
After reviewing the various options, it was concluded that the company would complete a 'buyback', a purchase of its own shares. This required a valuation of the shareholding, fundraising to buy the shares off the incumbent director & financial assistance audit work to satisfy the requirements of the Companies Act.
The funds were raised by way of an increased cashflow finance facility and an asset finance facility from a sale and leaseback of existing equipment. The remaining director also secured a term loan on personal terms with the bank. All facilities were provided by HSBC Bank plc.