What is a Scheme Of Arrangement?
A scheme of arrangement is a mandatory agreement between a company and either the holders of its securities or its creditors in which they receive cash or new stock in exchange for their existing holding.
The company may offer alternative options, for example the default option is to receive a combination of cash and stock but shareholders can elect to vary the proportion of cash and stock received, the scheme is still mandatory however and all shareholders existing shares will be exchanged.
In the event of a stock scheme of arrangement event, shareholders may have fractional share amounts. This is paid out by Barclays providing the value of the proceeds is in excess of £5. The Scheme usually requires court approval prior to completion.