PEG Petards Group Plc

 

TIDMPEG 
 
RNS Number : 1492M 
Petards Group PLC 
19 May 2010 
 

                                PETARDS GROUP PLC 
                                   (AIM: PEG) 
 
                             Capital Reorganisation 
 
Petards Group plc ("Petards" or "the Company"), the AIM quoted developer of 
advanced security and surveillance systems, announces that the Notice of 2010 
AGM and Annual Report and Accounts for the year ended 31 December 2009 are being 
sent to shareholders today. In addition, the Company is also sending notice of a 
circular and notice of a general meeting convened to approve a proposed capital 
reorganisation.  The above documents can be viewed from the Company's website, 
www.petards.com. 
 
Background to and reasons for the Capital Reorganisation 
 
The Company's share price has been below the nominal value of its Existing 
Ordinary Shares for some time.  Company law prohibits companies from issuing new 
shares at less than the nominal value, therefore at present the Company is 
restricted as to how it can use its shares: for example, it would currently be 
unable to raise new share capital from investors. 
 
At close of business on 13 May 2010, the latest practical date prior to 
publication of this Circular, the Company had 14,331 Shareholders of which 
13,632 had shareholdings of less than 10,000 shares. These 13,632 Shareholders 
account for 95 per cent. of the Shareholders by number, but represent less than 
1.5 per cent. of the total number of Existing Ordinary Shares. 
 
At the closing bid price of 0.48 pence on 13 May 2010, the latest practical date 
prior to the publication of this Circular, the market value of 10,000 shares 
would be GBP48.  The Directors consider that should a shareholder with less than 
10,000 shares choose to sell their shares, the proceeds will be significantly 
reduced or even completely eliminated by the dealing costs of selling. 
Therefore the Directors recognise that for small Shareholders it is uneconomic 
for them to dispose of their shares.  The Capital Reorganisation will allow 
certain small Shareholders to realise value for their shares free of dealing 
costs. 
 
Another benefit of the Capital Reorganisation is it will allow the Company to 
reduce certain costs associated with maintaining a large shareholder register in 
particular printing, postage and registrars' costs. 
 
For the reasons set out above, the Directors are proposing to reorganise the 
Company's share capital on the terms set out below. 
 
Capital Reorganisation 
 
Under the Capital Reorganisation, the Existing Ordinary Shares will be 
consolidated into New Consolidated Ordinary Shares on the basis of one New 
Consolidated Ordinary Share for each 10,000 Existing Ordinary Shares. Each New 
Consolidated Ordinary Share will then be sub-divided into 100 New Ordinary 
Shares and 9,900 Deferred Shares. 
 
Since the number of Existing Ordinary Shares is not exactly divisible by 10,000, 
Mr Wonnacott has agreed to subscribe for 3,577 ordinary shares of 1 pence each 
at a subscription price of 1 pence per share to increase the number of Existing 
Ordinary Shares to 636,710,000. 
 
Any fractions arising as a result of the Consolidation will be aggregated and, 
following the Sub-division, the Directors will, in accordance with the Articles 
sell the aggregated shares in the market for the benefit of the relevant 
Shareholders. 
 
The proceeds from the sale of the fractional entitlements shall be distributed 
pro rata amongst the relevant Shareholders save that where a Shareholder is 
entitled to an amount which is less than GBP3 it will (in accordance with the 
Articles) not be distributed to such Shareholder but will be retained by the 
Company for its benefit. 
 
One consequence of the Capital Reorganisation is that Shareholders holding less 
than 10,000 Existing Ordinary Shares will receive no New Ordinary Shares. 
 
Shareholders holding 10,000 Existing Ordinary Shares will receive 100 New 
Ordinary Share and 9,900 Deferred Shares. 
 
The rights attaching to the New Ordinary Shares will be identical in all 
respects to those of the Existing Ordinary Shares. 
 
The Deferred Shares will have no voting rights and will not carry any 
entitlement to attend general meetings of the Company.  They will carry only the 
right to participate in any return of capital to the extent of the amount paid 
up or credited as paid up on each Deferred Share but only after the holder of 
each New Ordinary Share has received in aggregate capital repayments amounting 
to GBP10,000,000 per New Ordinary Share.  Accordingly, the Deferred Shares will, 
for all practical purposes, be valueless and it is the Board's intention, at an 
appropriate time, to cancel the Deferred Shares. 
 
Existing share certificates will cease to be valid following the Capital 
Reorganisation.  New share certificates in respect of the New Ordinary Shares 
will be issued by 9 July 2010. No certificates will be issued in respect of the 
Deferred Shares, nor will CREST accounts of Shareholders be credited in respect 
of any entitlement to the Deferred Shares.  No application will be made for the 
Deferred Shares to be admitted to trading on AIM or any other investment 
exchange. 
 
A CREST Shareholder will have their CREST account credited with their New 
Ordinary Shares following their Admission, which is expected to be on 25 June 
2010. 
 
A General Meeting to obtain the necessary approval has been convened for 24 June 
at 2.15 p.m.  Capital Reorganisation.  The Capital Reorganisation is conditional 
upon the approval of the Shareholders at the GM as required by the Companies Act 
2006 and the Articles. 
 
The Definitions which apply in the Circular have been used in this announcement. 
 
+-----------------------------------+-----------------------------------+ 
| Contacts:                         |                                   | 
+-----------------------------------+-----------------------------------+ 
|                                   |                                   | 
+-----------------------------------+-----------------------------------+ 
| Petards Group plc                 |                   www.petards.com | 
+-----------------------------------+-----------------------------------+ 
| Andy Wonnacott, Finance Director  |              +44 (0) 191 420 3000 | 
+-----------------------------------+-----------------------------------+ 
|                                   |                                   | 
+-----------------------------------+-----------------------------------+ 
| WH Ireland Limited                |              www.wh-ireland.co.uk | 
+-----------------------------------+-----------------------------------+ 
| Mike Coe / Marc Davies            |              +44 (0) 117 945 3470 | 
+-----------------------------------+-----------------------------------+ 
|                                   |                                   | 
+-----------------------------------+-----------------------------------+ 
| Walbrook PR Limited               |                www.walbrookpr.com | 
+-----------------------------------+-----------------------------------+ 
| Paul McManus                      |         Tel: +44 (0) 20 7933 8787 | 
+-----------------------------------+-----------------------------------+ 
| paul.mcmanus@walbrookpr.com       |         Mob: +44 (0) 7980 541 893 | 
+-----------------------------------+-----------------------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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