15 November 2024
Steppe Cement Ltd
("Steppe Cement" or the
"Company")
Proposed Reduction & Repayment of Capital
and Notice of EGM
Steppe Cement (AIM: STCM), the AIM-traded Kazakh
cement producer, is pleased to announce the
Proposed Capital Repayment of approximately 1.5 pence per Ordinary Share, effected by
way of Capital Reduction pursuant to Section 53(9A) of the Labuan
Companies Act 1990, and its Notice of EGM.
The Proposed Capital Repayment requires Shareholder
approval of the Special Resolution to be proposed at an
Extraordinary General Meeting of the Company to be held at Suite
10.1, 10th Floor, West Wing, Rohas Perkasa, 8 Jalan Perak, Kuala
Lumpur, Malaysia on Friday, 6 December 2024 at 4.00 p.m.
MYT.
Subject to the approval of the Special Resolution at
the EGM, the Capital Reduction will have the effect of reducing the
Company's share capital from USD69,599,924 (divided into
219,000,000 Ordinary Shares) to USD65,399,924 (divided into
219,000,000 Ordinary Shares), and that such reduction be effected
by the capital repayment of USD4,200,000 in cash, which will be
paid in GBP, and is expected to equate to approximately 1.5 pence
per Ordinary Share, to Entitled Shareholders at the Record Date.
The number of outstanding Ordinary Shares will remain the same at
219,000,000.
A copy of the Circular containing more information in
relation to the Capital Reduction and Proposed Capital Repayment,
and Notice of EGM, will today be posted to Shareholders and will
shortly be available on the Company's website at https://www.steppecement.com/investors/aim-rule-26/.
Terms used in this announcement, but which are
otherwise undefined shall have the same meanings as set out in the
Circular. This announcement and the summary of the Capital
Reduction and Proposed Return of Capital should be read in
conjunction with the Circular.
For further information, please contact:
Steppe Cement Ltd
www.steppecement.com
Javier del Ser Pérez, Chief Executive Officer
Tel: +(603) 2166 0361
Strand Hanson
Limited (Nominated & Financial Adviser and Broker)
www.strandhanson.co.uk
James Spinney / Ritchie Balmer / Robert Collins
Tel: +44 20 7409 3494
The information
contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018,
as amended by virtue of the Market Abuse (Amendment) (EU Exit)
Regulations 2019.
Key
extracts from the Circular are set out below:
Details of the Proposed Capital Repayment by way of Capital
Reduction and Notice of Extraordinary General Meeting
1.
INTRODUCTION
Steppe Cement operates the Karaganda
cement factory in Kazakhstan. The Company
has a 100% subsidiary in Malaysia that in turns owns a 100%
subsidiary in Netherlands that holds 100% of three Kazakh
companies. It has a current annual
production capacity of 2 million tonnes of cement. In the
year ended 31 December 2023, the Company made a net profit of circa
USD 5 million or approximately 1.6 pence per ordinary share with
a turnover 7% lower than in 2022.
This year, the Company made an earlier capital
repayment of approximately 1.5 pence per ordinary share of no par
value each effected by way of capital reduction on 6 June
2024.
2.
RATIONALE FOR THE PROPOSED CAPITAL REPAYMENT
Steppe Cement Ltd and the
subsidiaries in its structure in Malaysia and the Netherlands have
sufficient capital to maintain their operations and pay their
expenses together with making all currently foreseeable investments
in plant and machinery. The Capital Reduction will allow the
Company to return excess capital to its shareholders while
maintaining adequate reserves for future development. A
distribution via a dividend would potentially incur tax charges in
numerous jurisdictions, whilst distribution via a share buy-back,
the possibility of which has been explored, was found to be
logistically inefficient. Accordingly, the Proposed Capital
Repayment is considered by the Board to be the most effective and
economical method of return of capital to shareholders and the
Board believes that the proposed Capital Reduction is worth the
extra time and expense. The Board would like to have the full
support and participation of the shareholders of the Company as the
resolution requires a 75% approval ratio.
For the avoidance of doubt, the
number of shares outstanding after the Capital Reduction has taken
effect will remain the same.
3.
EFFECTS OF THE PROPOSED CAPITAL REPAYMENT
3.1
Share Capital
If the Special Resolution is
approved at the EGM, the Capital Reduction will have the effect of
reducing the Company's share capital by USD4,200,000 (approximately
£3,261,000) from USD69,599,924.00 to USD65,399,924.00 by cancelling
and extinguishing capital to the extent of 1.9 US cents per share
(being the reduction in the stated capital of USD4,200,000 divided
by the 219,000,000 Ordinary Shares in issue) on each fully paid up
ordinary share of no par value each in the Company and the amount
by which the stated capital is so cancelled will be distributed (in
GBP) to Shareholders from the Group's existing cash
resources.
In accordance with Section 53(9A) of
the Labuan Companies Act 1990, the reduction of share capital by
way of a special resolution, may be made without confirmation by
the court so long as the Directors declare by way of a Declaration
of Solvency.
The Capital Reduction shall in no
way affect the validity of the Shareholders' existing share
certificates or CREST holdings.
The effects of the Proposed Capital
Reduction on the Company's issued and paid-up share capital are as
follows:
Unaudited
as of 30
Capital Reduction
June
pursuant to Proposed
After Proposed
2024*
Capital Repayment
Capital Repayment
Share capital (USD)
69,599,924
(4,200,000)
65,399,924
Number of shares
outstanding
219,000,000
-
219,000,000
*Being the most recent half year date prior to publication of
the Circular.
3.2
Funding
The Proposed Capital Repayment will
be funded via the Group's existing cash balances.
3.3
Earnings per Share
The Proposed Capital Repayment will
not affect the Earnings per Share of the Company as the number of
shares outstanding remains unchanged after the Proposed Capital
Repayment.
3.4
Shareholders' Interests
The Proposed Capital Repayment will
not have any effect on the percentage shareholdings of the
substantial shareholders of Steppe Cement Ltd as disclosed on the
Company's website or any other shareholders'
interests.
4.
TAXATION
Shareholders who are in any doubt as
to their tax position should consult an appropriate professional
tax adviser.
5.
EXPECTED TIMEFRAME FOR COMPLETION
The Proposed Capital Repayment is
expected to be completed by the end of 2024, with further
announcements, including the Record Date, to be made as appropriate
by the Company.
6.
PAYMENT OF THE PROPOSED CAPITAL REPAYMENT
Depositary Interest holders will
receive payment directly to their CREST payment account by way of
an assured payment obligation through the CREST system.
Certificated Shareholders will receive payment to their mandated
bank or building society account as recorded by the Registrar, or
by cheque if no such mandate is registered. Shareholders who are
recorded in the books of the Registrar as "gone away" will not have
their cheque issued until they contact the Registrar for security
reasons.
7.
EGM AND ACTION TO BE TAKEN
Shareholders will find the Notice of
EGM and the accompanying notes at the end of the Circular. The
Special Resolution requires at least 75 per cent of votes in favour
for it to be carried.
8.
BOARD'S RECOMMENDATION
The
Board unanimously recommends that Shareholders vote in favour of
the Special Resolution to be proposed at the Extraordinary General
Meeting.
Expected Timetable of Principal Events
Publication and posting of the Circular, the
Friday,
15 November 2024
Notice of EGM and the relevant Form(s) of
Proxy/Instruction
EGM
4.00
p.m. (MYT) on Friday, 6 December 2024
RNS Announcement on Capital Repayment
On
or around Thursday, 12 December 2024
dates
Definitions
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"AIM"
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the AIM market operated by the
London Stock Exchange.
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"Board"
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the board of directors of Steppe
Cement Ltd.
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"Capital Reduction"
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The reduction of share capital of
the Company from USD69,599,924.00 divided into 219,000,000 ordinary
shares of no par value each to USD65,399,924.00 divided into
219,000,000 ordinary shares of no par value each.
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"Certificated"
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an ordinary share recorded on a
company's share register as being held in certificated form
(namely, not in CREST).
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"Company or Steppe Cement"
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Steppe Cement Ltd (Company number
LL04433).
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"Circular"
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this Circular dated 14 November
2024.
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"CREST"
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the system (as defined in the CREST
Regulations) for the paperless settlement of trades in securities
and the holding of uncertificated securities operated by Euroclear
UK & International Limited.
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"CREST Regulations"
"Declaration of Solvency"
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the Uncertificated Securities
Regulations 2001 (SI 2001 No 01/3755).
a declaration of solvency by the
directors of a Labuan company or foreign Labuan company, as and
when required by the provisions of the Labuan Companies Act 1990,
and is deemed to be a statutory declaration within the meaning and
effect under the *Statutory Declarations Act 1960 [Act 60] and the
Penal Code [Act 574];
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"Depositary Interests"
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depositary interests in respect of
Ordinary Shares.
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"Director"
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the directors of the Company as at
the date of this document.
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"EGM"
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the Extraordinary General Meeting to
be held online at the office of Steppe
Cement Ltd, Suite 10.1, 10th Floor, West Wing, Rohas
Perkasa, 8 Jalan Perak, Kuala Lumpur, Malaysia on Friday, 6
December 2024 at 4.00 p.m. MYT.
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"Entitled Shareholders"
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persons who are registered as
holders of Ordinary Shares (Certificated Shareholders) on the
Record Date and persons who are registered as holders of Depositary
Interests holders on the Record Date.
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"Existing Ordinary Shares"
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the 219,000,000 Ordinary Shares of
no par value each in the capital of the Company in issue at the
date of this document.
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"Group"
"London Stock Exchange"
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Steppe Cement and its subsidiary
undertakings
London Stock Exchange
plc.
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"Labuan Companies Act"
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the Labuan Companies Act 1990 of
Federal Territory of Labuan, Malaysia.
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"Labuan FSA"
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the Labuan Financial Services
Authority; the central regulatory, supervisory and enforcement
authority of the international business and financial services
industry in Labuan.
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"Notice of EGM"
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The Notice of EGM as set out on page
11 of this Circular.
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"Ordinary Shares"
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Ordinary Shares of no par value each
in the capital of the Company.
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"Proposed Capital
Repayment"
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the Capital Repayment of, in
aggregate, USD4,200,000 in cash which will be paid in GBP (expected
to equate to approximately 1.5 pence per ordinary share of no par
value each) to be made to entitled Shareholders at the Record Date,
to be effected by way of Capital Reduction pursuant to
Section 53(9A) of the Labuan Companies Act 1990.
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"Record Date"
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date for Entitled Shareholders to
receive the Proposed Capital Repayment, and which will be announced
in due course by the Board, assuming the Special Resolution is
approved.
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"Registrar"
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Computershare Investor Services PLC,
The Pavilions, Bridgwater Road, Bristol BS13 8AE.
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"RNS"
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Regulatory News Service of London
Stock Exchange.
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"Shareholders"
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the holders of any issued Ordinary
Shares in the share capital of the Company (or Depositary Interests
in respect of Ordinary Shares in the share capital of the Company)
from time to time.
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"Special Resolution"
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the special resolution in relation
to the Proposed Capital Repayment to be tabled in the EGM that
requires a majority of not less than three fourths (75%) of such
shareholders votes to be approved.
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"UK" or "United Kingdom"
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the United Kingdom of Great Britain
and Northern Ireland.
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"£", "pence" and "GBP"
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the currency of the UK.
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"USD"
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the currency of the United States of
America.
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