111.   Creation and issue of debentures

            A company may create and issue secured or unsecured debentures.

112.   Security for debentures

            (1) The binding of movable property as security for any debenture or debentures may be effected by -

     (a)     a deed of pledge and the delivery of the movable property concerned to one or more debenture-holders or to a trustee for debenture-holders; or

     (b)     a notarial bond, collateral notarial bond or notarial surety bond executed in favour of one or more debenture-holders or of a trustee for debenture-holders; or

     (c)     the pledging of incorporeal rights by means of cession of such rights, whether present or future, in due and proper form.

            (2) The binding as aforesaid of immovable property may be effected by a mortgage bond, collateral mortgage bond or surety bond executed in favour of one or more debenture-holders or of a trustee for debenture-holders.

            (3) A wholly owned subsidiary shall be deemed to have and always to have had the power to mortgage any of its property as collateral security for the issue of debentures by its holding company.

113.   Bonds to be registered in deed registry; copies of documents to be annexed to bonds and deeds of pledge

            (1) Any mortgage bond or notarial bond in pursuance of the provisions of section 112 and subsequent transactions relating thereto shall, subject to the laws governing the registration of mortgage bonds and notarial bonds, be registered in the Deeds Registry.

            (2) If any such bond is in favour of one or more debenture-holders, a certified copy of the debenture concerned shall be annexed to the said bond.

            (3) If any such bond is in favour of a trustee for debenture-holders, certified copies of the debenture concerned and of the trust deed by which the trustee is appointed and in which the trustee’s rights and duties are defined, shall be annexed to the bond.

            (4) Certified copies of the debenture concerned and of any such trust deed, if any, shall be annexed to any deed of pledge where the debentures are secured by a pledge of movable property.

114.   Debenture may be registered

            If any debenture is executed before a notary public, it may, subject to the provisions of section 121(1), be registered in the Deeds Registry in like manner as if it were a notarial bond.

115.   Trustee for debenture holders

            (1) If a company issues or agrees to issue debentures of the same class to more than 10 persons, or to any one or more persons with a view to the debentures or any of them being offered for sale to more than 10 persons, the company shall before issuing any of the debentures -

     (a)     sign under its seal a debenture trust deed; and

     (b)     procure the signature to the deed by a person qualified to act as a trustee for debenture holders.

            (2) For the purposes of this section, debentures shall not be deemed to be of the same class if -

     (a)     they do not rank equally for repayment when any security created by the debenture is enforced or the company is wound up; or

     (b)     different rights attach to them in respect of -

           (i)       the rate of, or dates for, payment of interest,

          (ii)       the dates when, or the instalments by which, the principal of the debentures will be repaid, unless the difference is solely that the class of debentures will be repaid during a stated period of time and particular debentures will be selected by the company for repayment at different dates during that period by drawings, ballot or otherwise,

          (iii)       any right to subscribe for or convert the debentures into shares or other debentures of the company or any other company or corporation, or

         (iv)       the powers of the debenture holders to realise any security.

            (3) No debenture trust deed shall cover more than one class of debentures.

            (4) The Fifth Schedule to the Act shall apply to the following -

     (a)     the qualification, appointment and removal of a trustee for debenture holders;

     (b)     the naming of a successor to a trustee for debenture holders;

     (c)     the matters to be set out in the trust deed;

     (d)     the powers of the trustee for debenture holders;

     (e)     the right of the trustee for debenture holders to obtain information from the borrowing company;

     (f)      meetings of debenture holders;

     (g)     the duties of the trustee for debenture holders;

     (h)     repayment of loans or deposits where the purpose stated in a prospectus issued in relation to debentures, is not achieved; and

     (i)      release of the trustee for debenture holders.

116.   Issue of debentures at different dates and ranking of preference

            In any bond or deed of pledge executed in favour of a trustee for debenture-holders generally, provision may be made that the debentures thereby secured or to be secured may be issued from time to time and at different dates, as the company may determine, but all such debentures, whenever issued, shall rank in preference concurrently with one another as from the date on which the pledge was constituted or the bond was registered.

117.   Rights of debenture holders

            (1) Every holder of a debenture secured by a pledge or a bond executed in favour of a trustee for debenture-holders generally shall, unless it is otherwise provided by the deed of pledge, bond or trust deed and copy of the debenture annexed thereto, be entitled to enforce his rights under such debenture as soon as it has been issued to him in the same manner as if he were himself the pledgee or the holder of such bond.

            (2) No notice of the cession of any such debenture shall be necessary in order to confer upon any cessionary thereof the rights of the cedent.

118.   Power to reissue redeemed debenture in certain cases

            (1) Where a company has redeemed any debentures previously issued, not being debentures convertible into shares of the company, it shall, unless its constitution or the conditions of issue of such debentures expressly otherwise provide or the debentures have been redeemed in pursuance of any obligation on the part of the company to redeem them, (not being an obligation enforceable only by the person to whom the redeemed debentures were issued or his successors in title) have and be deemed at all times to have had power to keep the debentures alive for the purpose of re-issue, and, where a company has purported to exercise such a power, it shall have and be deemed at all times to have had power to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place, and upon such a re-issue the person entitled to the debentures shall have and shall be deemed at all times to have had the same rights and priorities as if the debentures had not previously been issued.

            (2) Where with the object of keeping debentures alive for the purpose of re-issue, they have been transferred to a nominee of the company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of this section.

            (3) Where a company had deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited.

            (4) Nothing in this section shall prejudice any power reserved to a company by its debentures or the securities therefor, to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished.

119.   Debenture to be described as secured or unsecured

            No debenture, debenture certificate or prospectus relating to debentures shall be issued by a company unless the term "debenture" or such other term denoting a debenture used therein is qualified by the word "secured" or "unsecured", as the case may be.

120.   Form of debentures or debenture certificates

            (1) No debenture or debenture certificate shall be issued by a company unless the conditions of the debenture concerned are stated on the debenture or on the debenture certificate.

            (2) Any debenture or debenture certificate shall be signed by one director of the company and an officer of the company duly authorised thereto by the directors and shall, in the case where the debenture concerned is not a bearer debenture and in the case of a debenture certificate, specify the debentures, other than bearer debentures, of that company held by the person named therein.

            (3) Any signature referred to in subsection (2) may be affixed to a debenture or debenture certificate by autographic or mechanical means.

            (4) Any debenture or debenture certificate issued in terms of this section shall be prima facie evidence of the title thereto of the person named therein or, in the case of a bearer debenture, of the bearer thereof.

121.   Register of pledges, cessions and bonds and Register of debenture holders

            (1) Every company shall keep at its registered office a register of charges and enter therein all charges affecting property of the company, giving in each case a short description of the property charged and the names and addresses of the persons in whose favour any charge or to whom any pledge has been delivered.

            (2) Every company shall keep at its registered office a register of debenture-holders showing the number of debentures issued and outstanding and whether or not they are payable to bearer and specifying the names and addresses of the holders, other than bearers, thereof.

            (3) The provisions of section 83 relating to the share register shall apply mutatis mutandis to the registers required to be kept by this section.

122.   Special powers of court

            A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance.

123.   Perpetual debentures

            Notwithstanding any other law, a condition contained in a debenture or in an agency deed for securing a debenture, whether the debenture or agency deed is issued or made before or after the commencement of this Act, shall not be invalid by reason that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period however long.

124.   Debentures to bearer

            (1) Subject to subsection (2) no company shall issue debentures to bearer.

            (2) The Minister may grant approval to a public company to issue debentures to bearer on such terms and conditions as the Minister may require.

125.   Filing of particulars of charges

            (1) Every company shall, within 28 days of the creation by the company of any charge or of making any issue of debentures charged on or affecting any property of the company, file with the Registrar a statement of the particulars specified in subsection (3) or (4) in the form prescribed in the Regulations made under this Act.

            (2) Where -

     (a)     a company acquires any property which is subject to a charge referred to in subsection (1), particulars of which would, if it had been created by the company after the acquisition of the property, have been required to be filed;

     (b)     a registered external company has, before registration, created a charge subject to subsection (1), particulars of which would if it had been created by the company while it was registered, have been required to be filed; or

     (c)     a registered external company has before registration acquired property which is subject to a charge subject to subsection (1) particulars of which would, if it had been created by the company after the acquisition and while it was registered, have been required to be filed, the company shall, within 28 days after the date on which the acquisition is completed or the date of the registration of the company in Botswana, as the case may be, cause a statement of the particulars specified in the form prescribed in Regulations made under this Act.

            (3) Subject to subsection (4), the particulars required to be given in the statement are -

     (a)     if the charge is a charge created by the company, the date of its creation, and if the charge was a charge existing on property acquired by the company, the date of the acquisition of the property;

     (b)     the amount secured by the charge;

     (c)     a description sufficient to identify the property charged;

     (d)     the rate of interest payable on the charge, and if applicable the way in which any variable rate of interest is to be calculated;

     (e)     the name of the person entitled to the charge; and

     (f)      any prohibition or restriction contained in the instrument creating the charge, or in any agency deed, on the power of the company to create any other charge or issue debentures ranking in priority to or equally with the charge or debentures in respect of which the application is made.

            (4) Where the holders of a series of debentures are entitled to the benefit of a charge the particulars required to be given in the statement are -

     (a)     the total amount secured by the whole series;

     (b)     the dates of the resolution authorising the issue of the series and the date of the agency deed or other instrument by which the security is created or defined;

     (c)     the name of the trustee for debenture holders; and

     (d)     the particulars required to be given by paragraphs (c) and (e) of subsection (3).

            (5) Where a charge (including an issue of debentures), particulars of which are required to be lodged under subsection (1) -

     (a)     is transferred by the charge-holder or trustee for debenture holders;

     (b)     is modified in a material respect; or

     (c)     has its priority altered in relation to any other charge or issue of debentures, the company or in the case of transfer, the transferee, shall lodge particulars, of the name and description of the transferee and of any material modification to the terms of the charge and of any alteration in priority, such particulars to be lodged within 28 days after the making of such transfer or modification or alteration of priority.

            (6) Where, in relation to a charge the particulars of which are required to be lodged under subsection (1) -

     (a)     the debt for which the charge was given has been paid or satisfied in whole or in part; or

     (b)     the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking of the company concerned, the company shall lodge a certificate of satisfaction in whole or in part, or of the fact that the property or undertaking has been released from the charge or has ceased to form part of the company’s property or undertaking, as the case may be.

            (7) The certificate shall be supported by evidence sufficient to satisfy the Registrar of the payment, satisfaction, release or cessation referred to in subsection (6).