1.   The issue of perpetual preference shares is being offered by underwriters led by Lehman Brothers.

2.   No final dividends are proposed on the new preference shares or the ordinary shares.

3.   Accordingly a premium payable on redemption of preference shares usually constitutes a distribution for tax purposes.

4.   When the preference shares are redeemed, the amount payable on redemption, less any premium, will not amount to a distribution.

5.   Thus, a subsequent bonus issue payable out of the share premium account which arises on conversion of the preference shares is taxed as a distribution.

6.   They are sometimes reserved in the Articles as class rights attaching to the preference shares or the preferred ordinary shares.

7.   The Articles will deal with the share rights of the various classes of share, the ratchet provisions and the terms upon which the preference shares become convertible.