Capital Reorganisation (9762H)
June 07 2011 - 2:40AM
UK Regulatory
TIDMPEG
RNS Number : 9762H
Petards Group PLC
07 June 2011
7 June 2011
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 2011 AGM and Annual Report and Accounts for the
year ended 31 December 2010 have been sent to shareholders. In
addition, the Company has sent 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 26 May 2011, the latest practical date
prior to publication of the Circular, the Company had 14,132
Shareholders of which 13,502 had shareholdings of less than 10,000
shares. These 13,502 Shareholders account for 95 per cent. of the
Shareholders by number, but represent 1.6 per cent. of the total
number of Existing Ordinary Shares.
At the closing bid price of 0.35 pence on 26 May 2010, the
latest practical date prior to the publication of the Circular, the
market value of 10,000 shares would be GBP35. 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.
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 8 July 2011. 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 1 July 2011.
A General Meeting to obtain the necessary approval has been
convened for 30 June at 11.15 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
This information is provided by RNS
The company news service from the London Stock Exchange
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