Under what circumstances may a company limited by shares pay interest out of capital.

Power of company to pay interest out of capital

Power of company to pay interest out of capital in certain cases where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or building or the provision of any plant which cannot be made profitable for a lengthened period, the company may pay interest on so much of that share capital as is for the time being paid up for the period and subject to the conditions and restrictions in this and may charge the same to capital as part of the cost of construction of the work or building or the provision of plant.