TIDMBMS
RNS Number : 7896P
Braemar PLC
14 February 2023
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE
REGULATION (EU NO. 596/2014) WHICH IS PART OF UK LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN
14 February 2023
BRAEMAR PLC
("Braemar" or the "Company" or the "Group")
Trading update
Capital reduction to increase capacity to pay future
dividends
Braemar Plc (LSE: BMS), a provider of expert investment,
chartering, and risk management advice to the shipping and energy
markets, today announces an update on trading for the year ending
28 February 2023, together with an intention to convene a General
Meeting ( " GM " ) in order to propose a capital reduction process
. The latter process is designed to increase the Group's
distributable reserves, increase the Group's capacity to pay future
dividends and provide sufficient distributable reserves to cover
all historic dividends paid .
Trading Update
The board of Braemar is pleased to report that the Group has
continued to trade well since the release of its interim results in
November 2022. The integration of the Group's newly acquired
Spanish and US businesses announced in December 2022 has progressed
well and both businesses are set to make an immediate and strong
contribution to the Group's trading in the next financial year
.
The board looks forward with confidence to providing a more
detailed update on trading for the year ending 28 February 2023 and
on expectations for the year to February 2024 in a pre-close update
to be announced in mid-March 2023.
Capital Reduction
As at the date of this announcement, Braemar has issued
32,919,252 Ordinary Shares. The Company has an amount standing to
the credit of the share premium account of GBP53,672,079 and an
amount of GBP23,366,000 in its merger reserve account. Both of t
hese accounts are non-distributable reserves and the Company is
unable to use these to, amongst other things, make distributions to
shareholders.
The Companies Act 2006 permits the Company (subject to the
approval of shareholders and the consent of the Court) to cancel or
reduce its share premium and certain other reserve accounts and
credit the resulting sum (less an amount equal to certain of the
Company's liabilities as at that date) to enhance the Company 's
distributable reserves. By increasing its distributable reserves in
this way, the Company increases its capacity and flexibility to pay
dividends.
Recognising the importance of dividends to shareholders and
reflecting the strong cash generation of the business, the board of
Braemar intends to seek shareholder approval to reduce the amount
standing to the credit of its share premium and capitalise and
reduce the merger reserve by approximately GBP75 million and create
distributable reserves to increase the Company's capacity and
flexibility to pay future dividends.
The reduction of the share premium and capitalisation of the
merger reserve and cancellation of the resultant share issue
requires the passing of special resolutions at a GM and subsequent
approval of the Court (the "Capital Reduction"). The Company
intends to send a notice convening a GM in due course and will
apply to the Court for approval of the Capital Reduction
conditional upon, and subsequent to, the passing of the necessary
shareholder resolutions at the GM. The Capital Reduction will not
be effective until the order of the Court confirming the reduction
has been registered with Companies House. The dates and times of
the GM and Court hearings will be set out in the GM circular.
Deeds of Release and Related Party Transaction
The Company has become aware that some historic dividends: i)
having been paid out of retained earnings which do not qualify as
distributable reserves under the Companies Act 2006 (the "Act")
and/ or ii) as a result of an administrative oversight by not
filing unaudited interim accounts at Companies House, as required
by the Act, (both the "Relevant Distributions") have been declared
and paid in infringement of the Act. Neither the amount, nor
payment of the Relevant Distributions, nor the Company ' s prior
audited accounts, are affected by this, nor is there any impact on
the Company ' s financial position at any time and the Company's
intention is that no party should be put in a worse position as a
result of these issues. The Company therefore intends to rectify
this situation at the same time as the Capital Reduction and
include appropriate resolutions at the GM to address the
matter.
A consequence of the Relevant Distributions is that the Company
may have a claim against its past and present shareholders who
received the Relevant Distributions, as well as a claim against all
directors who approved the Relevant Distributions at the time. The
Company has no intention to make such claims.
The Company will therefore enter into a deed of release in
favour of all shareholders who have received the Relevant
Distributions releasing them from any and all claims which the
Company has or may have in respect of the payment of the Relevant
Distributions (the " Shareholders ' Deed of Release " ) and a deed
of release in favour of all persons who were directors at the time
of payment of the Relevant Distributions, by which the Company
waives any rights to make claims against such directors in respect
of the Relevant Distributions (the " Directors ' Deed of Release "
and together with the Shareholders ' Deed of Release, the " Deeds
of Release " ).
The Deeds of Release are intended to ensure that the Company
will be unable to make any claims against its past and present
shareholders who were recipients of the Relevant Distributions or
against all persons who were directors at the time that the
Relevant Distributions were made.
As the Company's directors (comprising current and former
directors within the last twelve months, being James Gundy, Tris
Simmonds, Nick Stone, Nigel Payne, Elizabeth Gooch, Joanne Lake,
Stephen Kunzer and Lesley Watkins) are deemed to be related parties
of the Company pursuant to LR 11.1.4 R, it is expected that the
Company's entry into the Directors' Deed of Release for nil
consideration in respect of the Relevant Distributions will
constitute a related party transaction pursuant to LR 11.1.4 R.
Accordingly, subject to the approval of the FCA and in
accordance with LR 11.1.7 R, it is expected that a circular will be
posted to shareholders in due course, and that the Directors' Deed
of Release will become effective subject to shareholders passing
the necessary resolutions at the proposed GM. The Directors' Deed
of Release will also be conditional on the Court approving the
Capital Reduction.
The Company will make further announcements in respect of the
related party transaction in due course, as appropriate.
ENDS
For further information, contact:
Braemar Plc
James Gundy, Group Chief Executive Officer Tel +44 (0) 20 3142 4100
Nick Stone, Chief Financial Officer
Investec Bank plc
Gary Clarence / Harry Hargreaves / Alice Tel +44 (0) 20 7597 5970
King
Cenkos Securities plc Tel +44 (0) 20 7397 8900
Ben Jeynes / Max Gould (Corporate Finance)
Alex Pollen / Leif Powis (Sales)
Buchanan
Charles Ryland / Jamie Hooper / Jack Tel +44 (0) 20 7466 5000
Devoy
Notes to Editors:
About Braemar Plc
Braemar provides expert investment, chartering, and risk
management advice that enable its clients to secure sustainable
returns and mitigate risk in the volatile world of shipping and
energy. Our experienced brokers work in tandem with specialist
professionals to form teams tailored to our customers' needs, and
provide an integrated service supported by a collaborative
culture.
Braemar joined the Official List of the London Stock Exchange in
November 1997 and trades under the symbol BMS.
For more information, including our investor presentation, visit
www.Braemar.com and follow Braemar on LinkedIn .
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END
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