6.2.1 Imposing a restriction on shareholders' ability to transfer their interests in the Contractor is partly to prevent any party the Authority views as unsuitable from being involved in the Project (or in control of the Contractor) and partly because the Authority may take comfort from the original shareholders continuing to retain their economic stake in the Project.
6.2.2 The Authority should generally look to other provisions under the Contract to address its concerns about the effect which a change in shareholders may have on the Contractor. For example, any concerns relating to the ability of the Contractor to perform the Contract without the support of the original shareholders should be addressed by the termination rights.
6.2.3 The Authority may seek to restrict equity transfers if it is concerned that the original shareholders may leave the Project before all their equity commitments have been fulfilled. There should be no reason to prevent transfers of equity (following the end of the defects liability period, provided that any such deferred equity commitments are fully supported (e.g. by suitable letters of credit) and a substantially similar overall package is available from the proposed new shareholder (e.g. if technical support was provided by a shareholder in its capacity as a shareholder then, if still required, equivalent support should be put in place before a transfer can occur). It is not unreasonable for the Authority to restrict equity transfers in the Contractor by the Construction Sub-Contractor (or any of its Affiliates) until the end of the defects liability period, or by the Operating Sub-Contractor (or any of its Affiliates) until Service delivery is established.