Proposed Capital Reduction
December 17 2008 - 2:00AM
UK Regulatory
RNS Number : 2621K
Proventec PLC
17 December 2008
Press Release 17 December 2008
Proventec plc
("Proventec" or "the Company")
Proposed Capital Reduction
and
Notice of General Meeting
Proventec plc (AIM:PROV, Alternext:ALPTC), a provider of specialist steam cleaning and coatings technologies, announces that the Company
is to seek shareholder approval for a special resolution at a General Meeting ("GM") to be convened for 11 a.m. on Monday 19 January 2009 at
the offices of Pinsent Masons LLP, CityPoint, One Ropemaker Street, London EC2Y 9AH.
David Chestnutt, Chief Executive of Proventec, said: "As stated in the interims results, announced on Monday 24 November 2008, the Board
believes the Group's balance sheet would benefit from some restructuring. We are seeking approval from Shareholders to cancel the Company's
Share Premium Account and to reduce the issued share capital."
- Ends -
For further information, please contact:
Proventec plc
David Chestnutt, Chief Executive Tel: + 44 (0) 151 706 0626
dchestnutt@proventecplc.com www.proventecplc.com
Seymour Pierce Limited
Paul Davies, Corporate Finance Tel: + 44 (0) 20 7107 8031
pauldavies@seymourpierce.com www.seymourpierce.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Simone Alves Tel: +44 (0) 20 7398 7728
henry.ht@abchurch-group.com www.abchurch-group.com
NOTICE OF EXTRAORDINARY GENERAL MEETING
The following information is an excerpt from the circular to Shareholders (the "Circular") posted today. Copies of the Circular are
available at the offices of Seymour Pierce Limited (20 Old Bailey, London, EC4M 7EN) upon request. Definitions used in the Circular apply in
this announcement unless the context otherwise requires.
PROPOSED CAPITAL REDUCTION
INTRODUCTION
The Board most recently announced on 24 November 2008 (in conjunction with the Company's Interim Results) that the Group's balance sheet
would benefit from some restructuring in the near future. I am writing to you to provide further details of this restructuring, and to seek
the approval of Shareholders to the applicable steps (being a cancellation of the Company's Share Premium Account and a reduction of
capital) at a General Meeting at the offices of Pinsent Masons LLP, CityPoint, One Ropemaker Street, London EC2Y 9AH to be held on 19
January 2009. Notice of the General Meeting is set out at the end of this document.
BACKGROUND TO, AND REASONS FOR, THE CAPITAL REDUCTION
The Company is planning to restructure its balance sheet by way of a cancellation of the Share Premium Account and by way of a reduction
of its issued share capital. As at the date of this document, the balance of the Share Premium Account stood at �20,975,985 and the issued
share capital of the Company stood at �12,419,719. The Share Premium Account is attributable to the difference (or "premium") between the
nominal value of the Ordinary Shares issued by the Company and the price at which the Ordinary Shares were issued.
In light of the current economic climate (and to reflect applicable international accounting standards) the Board believes after careful
consideration that it is likely that the carrying value of some of the Company's investments will have to be reduced in the audited accounts
of the Company for the year ending 31 March 2009. Although the size of these reductions cannot yet be determined, the Board considers that
it is appropriate to assume that they might equate in aggregate to a significant proportion of the Share Premium Account. To plan ahead
therefore, the Board wishes to cancel the Share Premium Account before the financial year end, so as to enable the balance sheet to absorb
these reductions without increasing the deficit on the profit and loss account to potentially unattractive levels.
The Board also considers that, in light of such factors as the Company's current share price and the maturity and repayment of the Loan
Notes in 2012, it will be helpful to reduce the nominal value of the Ordinary Shares to 10p in order to assist the Company to react
appropriately and flexibly over the coming years to opportunities to raise funds and to issue shares.
The Board has therefore concluded that it would now be prudent to undertake the Capital Reduction.
FURTHER DETAILS ON THE CAPITAL REDUCTION
Under the Act, a company may cancel its share premium account and may reduce its share capital if so authorised by its articles of
association, provided that it obtains the approval of its shareholders by special resolution in general meeting and that the Court confirms
the cancellation and the reduction.
The Company is therefore seeking the approval of Shareholders to cancel its Share Premium Account and reduce its issued share capital
from �12,419,719, divided into 12,419,719 Ordinary Shares of �1 each to �1,241,971.90, divided into 12,419,719 Ordinary Shares of 10 pence
each by cancelling an amount equal to 90 pence on each Ordinary Share in issue. Following the Capital Reduction (and subject to any creditor
protections which the Court imposes), the deficit on the profit and loss account will be credited by the amount standing to the Share
Premium Account (being �20,975,985) and by the aggregate amount by which the share capital is reduced (being �11,177,747.10). It should be
noted that the Capital Reduction will not involve any distribution or repayment of capital by the Company to any Shareholder or involve any
reduction in the Company's underlying assets. The reduction in the nominal value of the Ordinary Shares should not in itself affect their
market value.
In order to obtain the approval of the Court for the Capital Reduction it is likely that the Company will be required to provide
security acceptable to the Court in respect of those creditors of the Company who do not consent to the cancellation of the Share Premium
Account and to the reduction of the Company's issued share capital. The Board is pleased to confirm that it has already obtained the consent
of the Loan Noteholders (being by far the major creditor of the Company) to the cancellation of the Share Premium Account and to the
reduction of the Company's issued share capital. As a term of obtaining this agreement from the Loan Noteholders, the Company has agreed
with Dresdner VPV NV (which currently holds the majority of the Loan Notes) not to declare any dividend (or other form of distribution) out
of any distributable reserves arising out of the cancellation and reduction for so long as Dresdner VPV NV (or any member of its group of
companies) holds at least �100,000 of the Loan Notes. The Company will put into place such form of protection for any other creditors of the Company as it may be advised is appropriate to obtain the
confirmation of the Court to the Capital Reduction.
It is expected that the Court Order confirming the Capital Reduction will be made on 6 February 2009, with the Capital Reduction
becoming effective on 9 February 2009 (upon registration of the Court Order with the Registrar of Companies). The Board reserves the right
to abandon or discontinue (in whole or in part) any application to the Court if the Board believes that the terms required to obtain
confirmation are unsatisfactory to the Company.
The existing share certificates which show the present nominal value of �1 per Ordinary Share will remain valid after the Capital
Reduction.
GENERAL MEETING
Set out in the Circular is a notice convening a General Meeting of the Company to be held at the offices of Pinsent Masons LLP,
CityPoint, One Ropemaker Street, London, EC2Y 9AH on 19 January 2009. At the General Meeting, a special resolution will be proposed to:
* approve the cancellation of the Share Premium Account;
* approve the reduction of the issued share capital of the Company from
�12,419,719, divided into 12,419,719 Ordinary Shares of �1 each into
�1,241,971.90, divided into 12,419,719 Ordinary Shares of 10 pence each,
and
* approve the sub-division of the unissued ordinary share capital of the
Company into shares of 10 pence each.
The purpose of the proposed sub-division of the unissued ordinary share capital is to ensure that, upon the Capital Reduction becoming
effective, all issued and unissued ordinary shares have the same nominal value of 10 pence each.
The proposed special resolution will be passed if at least 75 per cent. of the votes cast are in favour.
RECOMMENDATION
The Directors consider the proposals described in the Circular to be in the best interests of the Company and of Shareholders.
Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the resolution to be proposed at the General Meeting as
they intend to do in respect of the 125,542 Ordinary Shares in which they are beneficially interested.
Peter Teerlink
Chairman
17 December 2008
Expected timetable of principal events
Latest time and date for receipt of Forms of Proxy 11am on 17 January 2009
General Meeting 11am on 19 January 2009
Expected date for confirmation of the Capital 6 February 2009
Reduction by the Court
Expected effective date for the Capital Reduction 9 February 2009
These dates (except those of the receipt of Forms of Proxy and of the General Meeting) are estimates only, being subject to agreement of
hearing dates with the Court. The timetable assumes that the General Meeting is not adjourned as a result of there being no quorum, or for
any other reason. If there is an adjournment, all subsequent dates are likely to be later than those shown.
References to time in this document are to London time.
DEFINITIONS
The following definitions apply throughout this document, unless the context otherwise requires:
"Board" or "Directors" the board of directors of the Company
"Capita Registrars" a trading division of Capita IRG Plc
"Capital Reduction" the proposed cancellation by the Company of its
Share Premium Account and the reduction of its
issued share capital of the Company from
�12,419,719, divided into 12,419,719 Ordinary
Shares of �1 each to �1,241,971.90, divided into
12,419,719 Ordinary Shares of 10 pence, each as
described in this document
"Circular" this circular to shareholders of the Company
"Companies Act" or "Act" the Companies Act 1985, as amended and, to the
extent applicable, the Companies Act 2006
"Company" or "Proventec" Proventec plc
"Court" the High Court of England and Wales
"CREST Manual" the rules governing the operation of CREST
consisting of the CREST Reference Manual, the
CREST International Manual, the CREST Central
Counterpart Service Manual, the CREST Rules, the
CCSS Operations Manual, the Daily Timetable, the
CREST Application Procedures and the CREST
Glossary of Terms (as updated in November 2001)
"CREST Proxy Instruction" a properly authenticated CREST message appointing
and instructing a proxy to attend and vote in the
place of the Shareholder at the General Meeting
and containing the information required to be
contained therein by the CREST Manual
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI
2001 No. 3755), as amended
"CREST" the relevant system (as defined in the CREST
Regulations) for paperless settlement of share
transfers and the holding of shares in
uncertificated form in respect of which Euroclear
UK & Ireland is the operator (as defined in the
CREST Regulations)
"Effective Date" the date on which the order of the Court
confirming the cancellation of the Share Premium
Account has been registered by the Registrar of
Companies
"Euroclear UK & Ireland" Euroclear UK & Ireland Limited, the operator of
CREST (formerly CRESTCo Limited)
"Form of Proxy" the form of proxy for use at the General Meeting
enclosed with this document
"General Meeting" the General Meeting of the Company to be held on
19 January 2009 at 11am, notice of which is set
out on page 7 of this document
"Group" the Company and its subsidiaries from time to time
"Interim Results" the interim results of the Company for the six
months ended 30 September 2008
"Loan Notes" means the �15,000,000 8.5% convertible guaranteed
unsecured loan notes 2012 issued by the Company
pursuant to an instrument dated 24 August 2005 (as
amended and restated from time to time)
"Loan Noteholders" means the holders of the Loan Notes in the Company
"Ordinary Shares" fully paid ordinary shares of �1 each in the
capital of the Company
"Profit and Loss Reserve" means the profit and loss reserve of the Company
"Share Option Schemes" the existing share option schemes of the Company
as at the date of this document
"Share Premium Account" the share premium account of the Company
"Shareholders" holders of Ordinary Shares
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEAXAKFFPPFFE
Proventec (LSE:PROV)
Historical Stock Chart
From Sep 2024 to Oct 2024
Proventec (LSE:PROV)
Historical Stock Chart
From Oct 2023 to Oct 2024
