3.The Act’s main purpose is to permit the transformation of the Commonwealth Development Corporation (“CDC”) from a statutory corporation (see paragraph 10), governed by its own legislation (primarily the Commonwealth Development Corporation Act 1978) into a public company limited by shares (“plc”) governed, as other plcs, primarily by the Companies Act 1985. The transformation will take place without making CDC into a new legal entity. The purpose of this transformation is to make CDC a suitable vehicle for a Public/Private Partnership with private investors. In particular, as a plc, CDC will have a share capital (it does not at present) and will be able to issue shares. The Act also makes provision for the Government to continue to give certain financial assistance to CDC in the period in which it remains wholly owned by Government and to enable CDC to restructure financially.
4.Although initially the Government will be the sole shareholder, the intention of the Act is to prepare the way for the eventual sale of the majority holding in CDC plc. The Government intends to retain a substantial minority holding in CDC plc and the Secretary of State will have certain reserved rights as holder of a “Golden Share”.
Summary