34.4.1.1 Disposals of investments or commitments of junior capital in the Contractor which are equity or equivalent, such as shareholder subordinated debt, which in terms of rights is equity in all but name.605 Similarly exempt, are transactions involving dividends paid on equity and debt service on shareholder subordinated debt, once such dividends and payments have left the security net of all creditors having rights in relation to the cash-flow, assets or contracts of the Contractor.
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605 It is common practice however that the Authority will have some degree of approval rights over changes in ownership of the Contractor, particularly during the construction phase of a project. These are important where the shareholder has expertise which is relevant to that phase of the project (for example, a construction company which is also associated with construction being undertaken through the Contractor). The Authority should also consider the credit worthiness of providers of shareholder subordinated debt and equity in relation to restrictions on transfers before this capital is fully paid.