The B/S of ABC & Co. as on 31st March 2007 is as follows:
The re-organisation scheme approved by the court is as follows:
- Each share shall be sub-divided into 20 fully-paid equity shares of Rs 5 each.
- After sub-division, 95% of the holding will be surrendered by the shareholders.
- Of the surrendered shares, 46,000 shares of Rs 5 each are to be converted into 10% participating preference shares of Rs 5 fully-paid.
- Debenture-holders’ claim to be reduced to Rs 2,30,000 that will be satisfied by the issue of participating preference shares.
- Income tax liability is to be met.
- The claims of the unsecured creditors shall ...