Railways Act, 1921

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Power of constituent companies to issue redeemable debenture stock.

13.—(1) It shall be lawful for any constituent company and, with the consent of the constituent companies in the group, for any subsidiary company, prior to amalgamation under this Act, with the sanction of the Minister, and notwithstanding any limitation on the powers of borrowing of the company, to borrow on mortgage of its undertaking by means of terminable securities to such amount, at such rate of interest, redeemable within such period, and subject to such conditions as the Minister may sanction, with the consent of the majority in amount of the proprietors and of the holders of the existing mortgage securities of the company, at special meetings called for the purpose, but the amount so borrowed shall in no case exceed one-eighth of the existing mortgage securities of that company.

(2) The constituent companies in any group may, in like manner and subject to the like conditions, guarantee any such securities issued by any one or more of them, or by any one or more subsidiary companies in the group.

(3) Where a scheme of amalgamation or absorption has been referred to or is being prepared or has been confirmed or settled by the amalgamation tribunal, the powers under this section shall not be exercised by any constituent or subsidiary company affected by the scheme without the consent of the amalgamation tribunal.