Convertible Bond Issuances Using A Jersey Cash Box Structure

The economic impact of the COVID-19 pandemic has resulted in liquidity and cash flow challenges for many companies. As a consequence, companies may have to consider alternative ways to raise capital on an urgent basis. In this guide we outline the features of a Jersey cash box structure as used in convertible bond transactions and set out the main benefits of using a Jersey cash box company.

A Jersey cash box structure is a well-established financing tool for facilitating access by UK listed companies ("PLCs") to immediate funding by way of a convertible bond issue. 

One of the main rationales for using a cash box structure is that equity securities issued by PLC are issued for a non-cash consideration so that the statutory pre-emption provisions set out in the UK Companies Act 2006 do not apply. The issue can therefore take place without the timing implications of seeking shareholder approval to disapply the pre-emption rights or conducting a pre-emptive issue.