(1) A company may:
(a) convert an ordinary share into a preference share; and
(b) convert a preference share into an ordinary share.
Note: The variation of class rights provisions (sections 246B- 246G) will apply to the conversion.
(2) A company can convert ordinary shares into preference shares only if the holders' rights with respect to the following matters are set out in the company's constitution (if any) or have been otherwise approved by special resolution of the company:
(a) repayment of capital;
(b) participation in surplus assets and profits;
(c) cumulative and non-cumulative dividends;
(e) priority of payment of capital and dividends in relation to other shares or classes of preference shares.
(3) A share that is not a redeemable preference share when issued cannot afterwards be converted into a redeemable preference share.