Aspects Of Mauritian Equity And Debt Funding

FUNDING ISSUES

The process of obtaining a reduction in capital has to be borne in mind when the method of funding the Mauritian company is under consideration.

There are no debt/equity ratios in Mauritian law so a Mauritian company can be funded substantially by debt. Loan funding injected into a company can easily be brought out. By comparison, capital which is brought into a company can only be brought out again by obtaining a court order for the reduction of capital or by redeeming the shares. Redemption of shares is generally a better option.

Redeemable preference shares can be redeemed out of the proceeds of a fresh issue of shares or out of profits which would otherwise be available for payment of a dividend. Redeemable preference shares cannot be redeemed out of capital.