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ARTICLE · 14 APRIL 2025

Share Repurchases And Regulatory Consequences

Andersen in South Africa
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Under South Africa's Companies Act 71 of 2008, a share repurchase may qualify as a scheme of arrangement under Section 114 if it meets specific statutory and judicial criteria.

South AfricaCorporate/Commercial Law
Derrick Kaufmann
Derrick Kaufmann
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Under South Africa's Companies Act 71 of 2008, a share repurchase may qualify as a scheme of arrangement under Section 114 if it meets specific statutory and judicial criteria.

This classification hinges on the transaction's nature, procedural compliance and its impact on shareholder rights.

Below is a structured analysis of the key factors determining when a share repurchase constitutes a scheme of arrangement.

Statutory Framework

1. Definition of a Scheme of Arrangement
Section 114(1) broadly defines a scheme of arrangement as an "arrangement between a company and holders of any class of its securities". This includes reacquisitions of the company's own securities, such as share buy-backs, provided they:

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