Commonwealth Consolidated Acts

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Exclusion for amounts transferred under debt/equity swaps

             (1)  Subject to subsection (2), this Division does not apply to the transferred amount if:

                     (a)  the transfer is under an * arrangement under which:

                              (i)  a person discharges, releases or otherwise extinguishes the whole or a part of a debt that the company owes to the person; and

                             (ii)  the discharge, release or extinguishment is in return for the company issuing * shares (other than redeemable preference shares) in the company to the person; and

                     (b)  the transfer is a credit to the * share capital account that is made because of the issue of the shares in return for the discharge, release or extinguishment of the debt.

             (2)  If the transferred amount exceeds the lesser of:

                     (a)  the * market value of the * shares issued by the company; and

                     (b)  so much of the debt as is discharged, released or extinguished in return for the shares;

subsection (1) does not stop this Division from applying to the amount of the excess.

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