Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Fast Track Mergers

Two small companies, Meera Foods Ltd and Nilgiri Spices Ltd, propose a fast track merger. At the general meeting of Meera Foods, members holding 85% of the total number of shares vote in favour. What is the position under the fast track provisions?

The approval fails. Under the fast track route, the scheme must be approved at a general meeting by members holding at least ninety per cent of the total number of shares. Eighty-five per cent falls short of that threshold, so the scheme cannot proceed.

  1. AThe approval is sufficient because a simple majority of those present is enough
  2. BThe approval is sufficient because 75% in value of those voting is enough
  3. CThe approval is insufficient because members holding at least ninety per cent of the total number of shares must approveCorrect
  4. DThe approval is irrelevant because only creditors approve a fast track scheme

Explanation

Section 233(1)(b) requires approval by members or a class of members at a general meeting holding at least ninety per cent of the total number of shares. 85% falls short. The 75% in value threshold belongs to the regular section 232 route, so option B is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Fast Track Mergers shows your real accuracy, how long you take and where you lose marks.

Practise Fast Track MergersFree diagnostic mock

More Fast Track Mergers questions