TIDMKRS
RNS Number : 8769N
Keras Resources PLC
27 September 2019
Keras Resources plc / Index: AIM / Epic: KRS / Sector:
Mining
27 September 2018
Keras Resources plc ('Keras' or the 'Company')
Distribution of Calidus Shares & Proposed Capital
Reduction
Keras Resources plc, the AIM listed mineral resource company, is
pleased to announce that it will today post a Circular including a
notice of General Meeting to be held on 14 October 2019 detailing
the proposed distribution of its 33.71% interest in ASX listed
Calidus Resources Ltd ('Calidus') to the Company's Shareholders
('the Demerger'). The Circular and proxy forms are available to
view and download on Keras' website. The distribution will be made
through a shareholder and court approved capital reduction of the
Company and a repayment to shareholders of that capital in Calidus
shares ('Capital Reduction'). The Board believes that the Demerger
will release significant value to shareholders and represents the
most efficient way to provide shareholders with direct exposure to
both Keras's and Calidus's business interests.
The General Meeting of the Company will be held at Craven House,
West Street, Farnham, Surrey, GU9 7EN on Monday 14 October 2019 at
11.00 a.m.
Capitalised terms used in this announcement shall have the same
meaning as set out in the Circular issued by the Company dated 27
September 2019.
Overview
-- Intention to demerge entire 723,750,000 shareholding of
Calidus Shares held by Keras, and to distribute them to the
Eligible Shareholders (currently anticipated to be those on the
register at 6.00 p.m. on 19 November 2019)
-- Proposed Capital Reduction will result in the creation of
distributable reserves, which is required for the Company to then
effect the distribution of Calidus shares
-- The Demerger is considered to be a fundamental change of
business pursuant to AIM Rule 15 and therefore requires the
approval of Shareholders at a General Meeting to be held on 12
October 2019
-- Eligible Shareholders will receive 1 Calidus Share for every
3.44229 Ordinary Shares registered in their names on the Record
Date
Recommendation
-- On 25 September 2019, the latest practicable date prior to
the printing of the circular, the Calidus Shares had a total value
of GBP11,039,927 (based on the mid-market closing price quoted on
the ASX and the applicable rate of exchange between the pound and
the Australian dollar), which is greater than the total market
capitalisation of Keras of GBP10.46m at the same time.
-- The Directors believe the key advantages to the Demerger include:
o Total value for Shareholders will be materially increased by
separating the interests in the two businesses
o Current deficit on distributable reserves will be eliminated,
so that in future the Company will have flexibility to consider the
payment of dividends and otherwise return value to its
Shareholders
o Enables Keras to focus on commencing imminent production at
Nayega manganese mine in Togo and implementing strategy to invest
in other natural resources projects which the Board believe have
early cash flow potential
-- The Directors unanimously recommend that Shareholders vote in
favour of the Demerger as the Directors intend to do in respect of
their own (and connected persons') beneficial shareholdings
totalling 642,518,464 Ordinary Shares, representing approximately
25.79% of the Company's issued voting share capital as at the date
of the Circular
-- The Directors believe Calidus has a very exciting 12 months
ahead, with a fully funded large drill programme targeting mine
life increase for the Definitive Feasibility Study
Keras Post Demerger
-- 85% interest in Societé General des Mines ('SGM'), which
holds the exploration licences over the Nayega manganese project in
northern Togo, with an independent JORC compliant Measured and
Indicated mineral resource of 11Mt at 13.1% Mn and a Mineral
Reserve of 8.5Mt at 14.0%
-- Exploitation permit awaiting Government approval with
installed processing capacity to produce 6,500 tonnes per month of
beneficiated manganese ore. All paperwork complete, now only
awaiting the Council of Ministers Approval which requires all
involved Ministers to be present at one meeting. Keras continues to
actively engage with the Government of Togo to clear this final
hurdle
-- Togo has had a transformational year following accreditation
by Moody's Investors Service with a B3 credit rating and a single-B
rating with a stable outlook from Standard & Poor, validating
the Company's investment in Nayega
-- The Company continues to actively assess new projects that
require low capital expenditure and have near term cashflow
potential
-- Research published on Keras including a valuation on the
Nayega project is available on the Company's website:
https://www.kerasplc.com/company-research/
Russel Lamming, CEO of Keras Resources, said, "Today starts the
release of approximately GBP11m of value to shareholders with the
proposed distribution of Keras's Calidus shares and provides
visibility on the potential value of both companies. The Board is
pleased to participate in this distribution too and recommends that
you vote in favour of the resolutions.
"Post the Demerger, Keras will be transitioning from explorer to
producer and, subject to the grant of an exploitation permit, it is
well positioned to become a cashflow positive mining company with
the flexibility to consider the payment of dividends. Although the
Nayega permitting process has taken longer than expected, it is
important to note that Togo has also had a transformational year
following accreditation by Moody's Investors Service with a B3
credit rating and a single-B rating with a stable outlook from
Standard & Poor. This puts the country of eight million people
on a par with its neighbour Ghana. Recently, the Togolese Ministry
of Mines awarded a large-scale exploitation permit on the
Ledjoblibo clay deposit in the Kara region, approximately 200km
south of Nayega. We believe that the Nayega permit is part of the
Ministry's ongoing permitting schedule.
"Furthermore, we are focused on identifying additional value
accretive projects, which offer exposure to near-term cash
generation and look forward to updating shareholders on a regular
basis."
CIRCULAR DETAILS
IMPORTANT INFORMATION
Forward looking statements
Certain statements in this Document constitute "forward looking
statements". Forward looking statements include statements
concerning the plans, objectives, goals, strategies and future
operations and performance of the Company and the assumptions
underlying these forward looking statements. The Company uses the
words "anticipates", "estimates", "expects", "believes", "intends",
"plans", "may", "will", "should", "could" and any similar
expressions to identify forward looking statements. Such forward
looking statements involve known and unknown risks, uncertainties
and other important factors that could cause the Company's actual
results, performances or achievements to be materially different
from any future results, performances or achievements expressed or
implied by such forward looking statements. Such forward looking
statements are based on numerous assumptions regarding present and
future business strategies and the environment in which the Company
will operate in the future. These forward looking statements speak
only as at the date of this Document. The Company expressly
disclaims any obligation or undertaking to update or to revise any
forward looking statements, whether as a result of new information,
future events or otherwise except to the extent required by any
applicable law or regulation. All subsequent written or oral
forward looking statements attributable to the Company, or persons
acting on behalf of the Company, are expressly qualified in their
entirety by the cautionary statements contained throughout this
Document. As a result of these risks, uncertainties and
assumptions, a prospective investor should not place undue reliance
on these forward looking statements.
Expected Timetable of Principal Events
2019
Publication of this Document 27 September
Latest time and date for receipt of 11.00am on 10 October
Forms of Proxy for the General Meeting
General Meeting 11.00am on 14 October
Expected date of High Court hearing to confirm 5 November
the First Reduction
Expected effective date of the First Reduction 12 November
Expected date of High Court hearing to confirm 19 November
the Demerger Reduction
Expected Record Date * 6.00pm on the Business
Day of the High
Court
order for the Demerger
Reduction
Expected effective date of Demerger Reduction 26 November
Expected date for completion of the Demerger 26 November
Expected date for the transfer of Calidus By 29 November
Shares to Eligible Shareholders
* The Record Date is expected to be on or about 19 November 2019
and the Company will notify the firm date by Regulatory Information
System prior to the Demerger becoming effective.
Notes:
1) Each of the times and dates set out in the above timetable
and mentioned in this Document is subject to change by the Company,
in which event details of the new times and dates will be notified
by an appropriate announcement to a Regulatory Information
Service.
2) References to times in this Document are to London times unless otherwise stated.
3) All events in the above timetable following the holding of
the General Meeting are conditional upon: (i) the passing of the
Resolutions; (ii) approval of the Capital Reduction by the High
Court; and (iii) registration of the High Court Order confirming
the Capital Reduction with the UK Registrar of Companies.
LETTER FROM THE CHAIRMAN
Proposed Capital Reduction and Demerger of Calidus Shares
1. Introduction
Until June 2017, the Company carried out business as a gold
producer and explorer in Australia through its wholly owned
subsidiary, Keras (Gold) Australia Pty Limited. In order to develop
the exploration assets, further equity capital was required, which
the Board believed would be best achieved by listing on the ASX.
This listing involved reversing Keras (Gold) Australia Pty Limited
into an Australian shell company, which raised the required funds
and relisted on the ASX as Calidus Resources Limited. The Company
received both ordinary shares and performance shares in Calidus.
The performance shares converted to ordinary shares in Calidus on
the achievement of certain exploration milestones. Under ASX rules,
all the Calidus shares were in escrow for a period of 2 years. In
June 2019 the escrow period ended and in July 2019 the final
conversion milestone was achieved, so that the Company now owns
723,750,000 Calidus Shares.
On 25 September 2019, the latest practicable date prior to the
printing of this Document, the Calidus Shares had a total value of
GBP11,039,927 (based on the mid-market closing price quoted on the
ASX and the applicable rate of exchange between the pound and the
Australian dollar), which is greater than the total market
capitalisation of Keras of GBP10.46m at the same time.
In accordance with statements in successive annual reports of
Keras and the Company's announcement on 2 July 2019, the Company
today announced its intention to demerge its entire holding of
Calidus Shares and to distribute them to the Eligible Shareholders
by way of the Demerger.
The objective of the Demerger is to maximise value to Eligible
Shareholders through the Demerger of the Calidus Shares, and to
permit Keras to focus on operating the Nayega manganese mine in
Togo. In addition, the Directors are seeking other natural
resources projects, in Africa and elsewhere, which have the
potential to deliver positive cash flow in the short term.
The Demerger is considered to be a fundamental change of
business pursuant to Rule 15 of the AIM Rules and therefore
requires the approval of Shareholders at the General Meeting.
The purpose of this Document is to set out the background to and
reasons for the Capital Reduction and Demerger, explain why the
Directors believe that Capital Reduction and Demerger are in the
best interests of Shareholders as a whole and detail the
Resolutions to be put to the Shareholders at the General Meeting to
be held on 14 October 2019. The formal notice of the General
Meeting is set out at the end of this Document.
2. Background and reasons for the Demerger
The Board considers that the best interests of Shareholders are
served by arranging for them to hold their Keras shares with the
core mining business separately from the Calidus Shares and
believes that the total value for Shareholders will be materially
increased by separating the two. To achieve this, the Directors are
proposing the Demerger as set out in this Document. A secondary
advantage of the Demerger is that the current deficit on
distributable reserves will be eliminated, so that in future the
Company will have flexibility to consider the payment of dividends
and otherwise return value to its Shareholders.
For the purposes of the Act and applicable accounting standards,
the Company's capital comprises its share premium account, a non-
distributable capital reserve treated, except in limited
circumstances, as part of the Company's paid up share capital,
together with its Ordinary Shares and Deferred Shares.
In accordance with the Act, a company may, with the sanction of
a special resolution and the confirmation of the Court, reduce/
cancel its share capital and share premium account. It may apply
the sums resulting from such reduction, amongst other things, in
either repaying holders of the relevant shares the amounts paid up
on the share capital, which is reduced or cancelled or in crediting
the company's profit and loss account.
On 31 August 2019, and at the date of this Document, the total
capital of Keras amounted to GBP18,204,730 comprising a share
premium account of GBP10,938,195, Deferred Shares of GBP4,775,178
and Ordinary Shares of GBP2,491,357. The Deferred Shares have no
voting rights or value to Shareholders, and it is proposed that
they be cancelled in their entirety. So far as the Ordinary Shares
are concerned, it is proposed that the nominal value of each share
be reduced from 0.1p per share to 0.01p per share, thus reducing
the total nominal value of the Ordinary Shares in issue from
GBP2,491,357 to GBP249,136. On this basis the total Capital
Reduction will be GBP17,955,594.
At 31 August 2019, the Company had a deficit on profit and loss
account of GBP9,676,042. As a first step to achieving the Demerger,
it is necessary to eliminate this deficit by cancelling the balance
standing to the credit of the Company's share premium account. This
is the First Reduction.
Once the First Reduction has become effective, the Company will
undertake the Demerger Reduction, pursuant to which (i) the capital
paid up on each issued Deferred Share and (ii) capital in the sum
of 0.09p paid up on each issued Ordinary Share will be cancelled
and repaid to Eligible Shareholders. In satisfaction of the
Company's obligation to repay the capital released pursuant to the
Demerger Reduction, the Company will transfer Calidus Shares to
Eligible Shareholders on a pro rata basis.
The Company currently has 2,491,358,439 Ordinary Shares in issue
and owns 723,750,000 Calidus Shares. Pursuant to the Demerger,
Eligible Shareholders will receive 1 Calidus Share for every
3.44229 Ordinary Shares registered in their names on the Record
Date. Fractional entitlements will be ignored.
If the First Reduction and the Demerger Reduction are approved
by the Shareholders at the General Meeting, they will be subject to
the scrutiny of, and confirmation by, the High Court to ensure that
the interests of existing creditors are protected and, subject to
confirmation of each of the First Reduction and the Demerger
Reduction; and registration by the Registrar of Companies of the
order of the High Court, is the Demerger is expected to take effect
on 26 November 2019. Assuming that there is no material change in
the financial position or prospects of the Company, and subject to
any undertakings which the Company may be required to offer the
High Court for the protection of creditors, the Directors
anticipate that the Capital Reduction will result in the creation
of distributable reserves of approximately GBP2.2 million as shown
in the Pro Forma Balance Sheet on page 15 of the Circular.
Calidus will continue to be listed on the ASX, and to comply
with the ASX disclosure requirements including regular news
releases and updates on business development and performance. These
will be available on the website of Calidus at www.calidus.com.au.
Calidus Shares transferred to Eligible Shareholders will be in
issuer-sponsored form. Calidus' share register administers the
security holder's holding and issues the investor with a
security-holder reference number (SRN) which may be quoted when
selling. Further information on the ASX is included in Part 2 of
the Circular.
For UK tax purposes Calidus is classified as a quoted company
rather than an unquoted company, as is the case with Keras.
Following the Capital Reduction, existing Keras share
certificates (including share certificates issued when the
Company's name was Ferrex plc) will remain valid in respect of
certificated holdings in the Company. With regard to uncertificated
shareholdings, the existing ISIN of GB00B649J414 will not
change.
3. Capital Reduction - Procedure
In order to effect the First Reduction and the Demerger
Reduction, the Company first requires the authority of its
Shareholders by the passing of the Resolutions at the General
Meeting.
Following the General Meeting the Company will make applications
to the High Court to confirm the First Reduction and Demerger
Reduction. Once the First Reduction and Demerger Reduction have
been approved by the High Court and have become effective upon
registration of the Court orders by the Registrar of Companies, the
Company shall complete the Demerger through the distribution to the
Eligible Shareholders in specie all of the Calidus Shares on the
basis set out above.
The Company has provisionally scheduled the two Court hearings
to effect the Capital Reduction. At the first hearing on 5 November
2019, the Company will ask the Court to confirm the First
Reduction. If the Court confirms the First Reduction, the Company
will deliver the Court's order to the Registrar of Companies for
registration, whereupon the First Reduction will become effective.
At the second Court hearing, which has been provisionally scheduled
to take place on 19 November 2019, the First Reduction will have
become effective, the Company will ask the Court to confirm the
Demerger Reduction. If the Court confirms the Demerger Reduction,
the Company will deliver the Court's order to the Registrar of
Companies for registration, whereupon the Demerger Reduction will
become effective. The effective date for completion of the Demerger
is currently expected to be no later than 26 November 2019.
In order to approve the Capital Reduction, the High Court will
need to be satisfied that the interests of the creditors of the
Company will not be prejudiced. It is unlikely that any undertaking
will be required to be given by the Company for the protection of
creditors, given that the Company has been advised that the
relatively small amount due to creditors and the value of the
assets and the continuing business of the Company, reduce the
likelihood that such an undertaking would be required.
The Directors reserve the right (where necessary by application
to the High Court) to abandon, discontinue or adjourn any
application to the High Court for confirmation of the Capital
Reduction, and hence the Capital Reduction and Demerger, if the
Directors believe that the terms required to obtain confirmation
are unsatisfactory to the Company or if, as the result of a
material unforeseen event, the Directors consider that to continue
with the Capital Reduction and Demerger is inappropriate or
inadvisable.
5. Taxation
Under UK tax law, the Demerger should, subject to the tax
position of any particular Shareholder, result in individual UK
resident taxpayers receiving their proceeds as capital for taxation
purposes, although dealers in securities or persons regarded as
having obtained their Ordinary Shares or Deferred Shares by reason
of employment, may have a different tax treatment and should seek
professional advice on their own position. For information
regarding the tax position of the Demerger, please see Part 2 of
this Document.
The Calidus Shares come within the definition of taxable
Australian property for the purposes of Australian taxation. It
follows that the Demerger is potentially an event which could give
rise to a tax liability in Australia, so far as either the Company
or the Eligible Shareholders are concerned. A draft Class Ruling
("Ruling") has been obtained from the Australian Tax Office ("ATO")
confirming that the transactions set out in this document will
qualify for demerger rollover relief in Australia, so that no
liability for Australian tax will fall on the Company or any
Eligible Shareholder who is a UK resident for tax purposes. A final
Ruling will only be issued by the ATO following confirmation by the
Court of the Demerger Reduction.
In general terms, a future sale of Calidus shares by Eligible
Shareholders who are UK resident will not be subject to Australian
tax provided the shareholder does not hold a 10% or greater
shareholding interest in Calidus at the time.
If you are subject to taxation in a jurisdiction other than the
UK or Australia or are in any doubt as to your tax position, you
should consult an appropriate independent professional adviser.
6. Australian Shareholders
Australian resident shareholders will be eligible for demerger
rollover relief. In accordance with the draft Ruling, the following
Australian tax consequences will arise for Australian shareholders
who choose demerger rollover relief for their Keras shares:
(i) Any capital gain made will be disregarded;
(ii) The cost base of Keras shares will be reduced and
apportioned between Keras and Calidus shares based on their
relative market values as of the Record Date;
(iii) Holders will be taken to have acquired the Calidus shares
for the purpose of whether a discount capital gain is made from a
future disposal of those shares on the date that the corresponding
Keras shares were acquired; and
(iv) No part of the value of the Calidus shares will be treated as an assessable dividend.
Further details will be included in the Ruling when it is issued
by the ATO.
7. Other Overseas Shareholders
The implications of the Demerger for Other Overseas Shareholders
may be affected by the laws of the jurisdiction in which they are
resident or otherwise located. Other Overseas Shareholders should
inform themselves about and observe all applicable legal
requirements. It is the responsibility of any person into whose
possession this document comes, to satisfy themselves as to the
full observance of the laws of the relevant jurisdiction in
connection with the transfer of Calidus Shares pursuant to the
Demerger, including the obtaining of any governmental, exchange
control or other consents which may be required, and/or compliance
with other necessary formalities which are required to be observed
and the payment of any issue, transfer or other taxes or levies due
in such jurisdiction.
8. Action to be taken
A reply-paid Form of Proxy for use in connection with the
General Meeting is enclosed with this Document. Whether or not you
intend to be present at the General Meeting, you are requested to
complete, sign and return the Form of Proxy in accordance with the
instructions printed thereon to the Company at its registrars (by
post to Share Registrars Limited at The Courtyard, 17 West Street,
Farnham, Surrey GU9 7DR or by scan and email to
voting@shareregistrars.uk.com) as soon as possible and, in any
event, not later than 11.00 a.m. on 10 October 2019, being 48 hours
(excluding non-business days) before the time of the General
Meeting. The completion and return of the Form of Proxy will not
preclude you from attending the General Meeting and voting in
person should you subsequently wish to do so.
The Demerger can only be implemented if the Resolutions are
approved by the requisite majority at the General Meeting and the
Capital Reduction is confirmed by the High Court. It is therefore
important that you either vote in person or by proxy at the General
Meeting.
Shareholders are reminded that, if their Ordinary Shares are
held in the name of a nominee, only that nominee or its duly
appointed proxy can be counted in the quorum at the General
Meeting.
9. Recommendation
The Directors consider that the proposals and the passing of the
Resolutions to be proposed at the General Meeting is in the best
interests of the Company and its Shareholders as a whole.
Accordingly, your Directors unanimously recommend that you vote in
favour of the Resolutions set out in the notice of General Meeting
as the Directors intend to do in respect of their own (and
connected persons') beneficial shareholdings totalling 642,518,464
Ordinary Shares, representing approximately 25.79% of the Company's
issued voting share capital as at the date of this Document.
Whether or not you are able to attend the General Meeting in
person, please read the notice of General Meeting set out at the
end of this Document and the enclosed Form of Proxy, including the
notes thereto carefully, to ensure you are able to record your
votes in respect of the Resolutions to be proposed at the General
Meeting.
Yours sincerely
Brian Moritz
Non-Executive Chairman
THE AUSTRALIAN SECURITIES EXCHANGE
The Australian Securities Exchange (ASX) is Australia's primary
securities exchange. It is owned by the Australian Securities
Exchange Ltd, an Australian public company. Prior to December 2006
it was known as the Australian Stock Exchange, which was formed on
1 April 1987, incorporated under legislation of the Australian
Parliament as an amalgamation of the six state securities
exchanges.
Currently, ASX has an average daily turnover of approx. A$4.685
billion (GBP2.6 billion) and a market capitalisation of approx.
A$1.9 trillion (GBP1.06 trillion), making it one of the world's top
16 listed exchange groups.
ASX is a market operator, clearing house and payments system
facilitator. It also oversees compliance with its operating rules,
promotes standards of corporate governance among Australia's listed
companies and helps to educate retail investors.
All ASX equity securities are traded on screen on ASX Trade. ASX
Trade is a NASDAQ OMX ultra-low latency trading platform based on
NASDAQ OMX's Genium INET system, which is used by many exchanges
around the world. It is one of the fastest and most functional
multi-asset trading platforms in the world, delivering latency down
to 250 microseconds.
Security holders hold shares in one of two forms, both of which
operate as uncertificated holdings, rather than through the issue
of physical share certificates:
1. Clearing House Electronic Sub-Register System (CHESS). The
investor's controlling participant (normally a broker) sponsors the
client into CHESS. The security holder is given a "holder
identification number" (HIN) and monthly statements are sent to the
security holder from the CHESS system when there is a movement in
their holding that month.
2. Issuer-sponsored. The company's share register administers
the security holder's holding and issues the investor with a
security-holder reference number (SRN) which may be quoted when
trading in Calidus securities.
Holdings may be moved from issuer-sponsored to CHESS or between
different brokers by electronic message initiated by the
controlling participant.
Many British-based stockbrokers can buy and sell shares listed
on ASX, and may produce contract notes in sterling or in Australian
dollars. Because of the time difference, deals are typically
processed when the ASX next opens. Alternatively, holders of
Calidus Shares resident in the UK are able to open an account with
an Australian stockbroker.
TAXATION
The following comments are intended as a general guide only and
are based on current UK legislation and Her Majesty's Revenue and
Customs practice as at the date of this Document. These comments
deal only with Shareholders who are resident for taxation purposes
in the United Kingdom, who are the absolute beneficial owners of
fully paid Ordinary Shares and Deferred Shares and who hold such
shares as an investment. These comments do not deal with other
classes of Shareholders, including dealers in securities or persons
regarded as having obtained their Ordinary Shares or Deferred
Shares by reason of employment. Therefore, such shareholders are
advised to satisfy themselves as to the tax consequences for them
of their ownership of the Ordinary Shares or Deferred Shares in the
Company.
Subject to the comments below, the Company expects the Return of
Capital to be classified as a repayment of capital on the Ordinary
Shares under section 1000(1)(B)(a) CTA 2010 and therefore would not
expect any part of the proceeds received by a Shareholder on the
Return of Capital to be an income distribution in the Shareholders
hands.
Part 15 CTA 2010 and Chapter 1 ITA 2007 contain anti-avoidance
provisions which may apply to the Return of Capital so as to treat
all or part of the proceeds as income, rather than capital, in the
hands of the Shareholders. Whilst these rules contain a number of
subjective tests, the Company does not expect either Part 15 CTA
2010 or Chapter 1 ITA 2007 to apply to the Return of Capital.
On the basis of the above, the Company expects the Return of
Capital to be treated as a deemed part disposal of the Ordinary
Shares for Shareholders under section 122 TCGA 1992 which may give
rise to a liability for Shareholders to either capital gains tax or
corporation tax depending on the Shareholder's individual
circumstances (including the availability of exemptions, reliefs of
allowable losses). Please see example below.
In accordance with section 748 of the Corporation Tax Act 2010
and section 701 of the Income Tax Act 2007, the Company has applied
for clearance from HM Revenue & Customs that they are satisfied
that the transactions in securities provisions should not be
applied to the proposal.
Example
Please note, that the example below is for illustrative purposes
only.
The Demerger will be treated as a part disposal by Shareholders
and the tax treatment will vary depending on individual
circumstances. As only part of the investment in Keras has been
returned, only part of the cost of that investment can be deducted
in the tax computation of the gain or loss accruing on the part
disposal.
The allowable investment expenditure is apportioned using the
formula A / (A + B) x C, where:
A = the value of the Calidus Shares received
B = the market value of the shareholding in Keras after the
Demerger
C = the original cost of Ordinary Shares
-- Shareholder owns 3,200,000 Ordinary Shares
-- Original cost of investment is GBP20,000 (C)
-- Capital returned is 1,000,000 Calidus Shares at $0.03 per share ($30,000 = GBP16,949) (A)
-- The exchange rate at date of distribution is GBP/AUD 1.77
-- The value of the Keras shareholding after capital
distribution is GBP6,400 (B)
The cost apportioned to the disposal is (20,000 x 16,949/
(16,949+6400)) = GBP14,518
The gain on Demerger is
Capital returned 16,949
Less: allowable cost of investment 14,518
-------
Gain on Return of Capital 2,431
-------
As the gain of GBP2,431 is below the personal capital gains tax
allowance for 2019/20 of GBP12,000 (assuming no other transactions)
no capital gains tax would be payable.
The value of each Calidus Share received (as in A above) will be
as at the date of the distribution and the market value of a share
in Keras will be the open market value after the Demerger (as in B
above) and will be prominently displayed on the Keras website -
www.kerasplc.com - on completion of the Demerger.
Please note that the Company is not able to provide tax advice
and this example is for illustrative purposes only. You should
accordingly seek appropriate guidance or advice when completing any
tax return which reflects any matters for which the apportionment
is relevant.
FINANCIAL INFORMATION
UNAUDITED BALANCE SHEET OF KERAS AT 31 AUGUST 2019
Unaudited Audited
31 August 30 Sept.
2019 2018
GBP'000 GBP'000
Assets
Property, plant and equipment 316 230
Other investments - -
Non-current assets 316 230
----------- ----------
Financial assets at fair
value 12,024 11,527
Loans to subsidiaries 1,756 1,484
Trade and other receivables 17 15
Unpaid share capital 323 -
Cash and cash equivalents 10 208
----------- ----------
Current assets 14,130 13,234
----------- ----------
Total assets 14,446 13,464
----------- ----------
Equity
Share capital 7,267 7,064
Share premium 10,938 10,358
Assets for sale reserve 5,559 5,063
Other reserves 150 108
Retained deficit (9,676) (9,876)
----------- ----------
Total equity attributable to owners of
the Company 14,238 12,717
-----------
Liabilities
Trade and other payables 57 707
Accruals 151 40
----------- ----------
Current liabilities 208 747
----------- ----------
Total liabilities 208 747
----------- ----------
Total equity and liabilities 14,446 13,464
----------- ----------
PRO-FORMA BALANCE SHEET OF KERAS
The pro-forma Balance Sheet of Keras set out below is based on
the unaudited Balance Sheet at 31 August 2019 adjusted for the
effect of the Resolutions to be proposed at the General Meeting,
comprising:
1. The First Reduction; and
2. The Demerger Reduction
Unaudited First Demerger Pro-forma
31 August Reduction Reduction
2019 GBP'000
GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 316 316
Other investments - -
Non-current assets 316 316
----------- ----------- ----------- ----------
Financial assets at fair
value 12,024 (12,024) -
Loans to subsidiaries 1,756 1,756
Trade and other receivables 17 16
Unpaid share capital 323 323
Cash and cash equivalents 10 11
----------- ----------- ----------- ----------
Current assets 14,130 (12,024) 2,106
----------- ----------- ----------- ----------
Total assets 14,446 (12,024) 2,422
----------- ----------- ----------- ----------
Equity
Share capital 7,267 (7,018) 249
Share premium 10,938 (10,938) -
Assets for sale reserve 5,559 (5,559) -
Other reserves 150 150
Retained deficit (9,676) 10,938 553 1,815
----------- ----------- ----------- ----------
Total equity attributable to owners
of the Company 14,238 - (12,024) 2,214
-----------
Liabilities
Trade and other payables 57 57
Accruals 151 151
----------- ----------- ----------- ----------
Current liabilities 208 208
----------- ----------- ----------- ----------
Total liabilities 208 208
----------- ----------- ----------- ----------
Total equity and liabilities 14,446 2,422
----------- ----------- ----------- ----------
DEFINITIONS
Act the Companies Act 2006
AIM the market of that name operated
by the London Stock Exchange
Plc
AIM Rules the AIM Rules for Companies
ASX Australian Securities Exchange
Limited
ATO Australian Taxation Office
Board the board of directors of the
Company from time to time
Calidus Calidus Resources Limited
Calidus Shares the 723,750,000 ordinary shares
in Calidus held by the Company
Capital Reduction the proposed reduction of the
Company's capital by way of
the First Reduction and the
Demerger Reduction, as described
in this Document
Company or Keras Keras Resources Plc
CREST the computerised settlement
system (as defined in the CREST
Regulations) operated by Euroclear
UK & Ireland Limited which facilitates
the transfer of title to shares
in uncertificated form
Deferred Shares the deferred shares of 0.4p
each in the capital of the Company
Demerger the demerger of all of the Calidus
Shares to the Eligible Shareholders
on a pro rata basis in satisfaction
of the Company's obligation
to repay the capital released
pursuant to the Demerger Reduction
as described in this Document
Demerger Reduction the cancellation of: (i) capital
in the sum of 0.09p paid up
on each issued Ordinary Share
and (ii) the capital paid upon
on each issued Deferred Share
Directors the directors of the Company
as at the date of this Document
whose names are set out on page
5 of this Document
Document or Circular this document, being a circular
to Shareholders and the accompanying
notice of General Meeting dated
27 September 2019
Eligible Shareholders the holders of the Ordinary
Shares as at the Record Date
First Reduction the cancellation of the Company's
share premium account to eliminate
the deficit on the Company's
profit and loss account
Form of Proxy the form or forms of proxy accompanying
this Document relating to the
General Meeting
General Meeting or GM the general meeting of the Company,
convened by the notice set out
on page 19 of this Document,
to be held at 11.00a.m. at Craven
House, West Street, Farnham,
Surrey, GU9 7EN, on 14 October
2019, or any adjournment of
that meeting, which is being
held to consider the Resolutions
Keras or the Company Keras Resources Plc, a company
incorporated and registered
in England and Wales under company
number 07353748
New Ordinary Shares following the Demerger Reduction
ordinary shares of 0.01p each
in the capital of the Company
Ordinary Shares the ordinary shares of 0.1p
each in the capital of the Company
Other Overseas Shareholders those Eligible Shareholders
with registered addresses outside
the UK or Australia who are
incorporated in, registered
in or otherwise resident or
located in, countries outside
the UK or Australia
Record Date 6.00pm on the Business Day of
the High Court
order for the Demerger Reduction
Regulatory Information Service any of the services authorised
from time to time by the UK
Financial Conduct Authority
for the purposes of disseminating
regulatory announcements
Resolutions the resolutions set out in the
notice of General Meeting
Shareholders holders of Ordinary Shares or
New Ordinary Shares (as applicable)
from time to time
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of Russell Lamming, Chief Executive Officer. This
announcement contains inside information for the purposes of
Article 7 of Regulation (EU) 596/2014.
**ENDS**
For further information please visit www.kerasplc.com, follow us
on Twitter @kerasplc or contact:
Russell Lamming Keras Resources plc info@kerasplc.com
Nominated Adviser / Broker
Ewan Leggat / Charlie SP Angel Corporate Finance +44 (0) 20 3470
Bouverat LLP 0470
Financial PR
Isabel de Salis / Cosima +44 (0) 20 7236
Akerman St Brides Partners Ltd 1177
Notes
Keras Resources plc is focused on building a strategic portfolio
of resource assets. The Company provides investors with exposure to
the near-production Nayega manganese mine ('Nayega') and the
Kamino, cobalt and nickel project in Togo, West Africa. It also has
a significant interest in Calidus Resources Limited, a highly
prospective gold exploration and development company in Australia,
which completed a Pre-Feasibility Study at its Warrawoona gold
project in July 2019. Keras benefits from a supportive Board of
Directors currently owning 25.8% of the Company and a highly
skilled management team, which has extensive operational experience
in Africa and Australia and proven success in advancing assets up
the value curve.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCEANNKASLNEFF
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