Capital Reorganisation
25 Juli 2008 - 4:18PM
UK Regulatory
PANTHEON LEISURE PLC ("THE COMPANY")
CAPITAL REORGANISATION AND CAPITAL CANCELLATION
The Company announces a proposed Capital Reorganisation conditional upon
Shareholder approval and a Capital Cancellation conditional upon Shareholder
and High Court approval. The Company is not currently in a position to pay
dividends or effect a purchase of its own shares since its profit and loss
account is in deficit. Further details of the proposals are set out below.
A circular containing the Notice of General Meeting is being posted to
Shareholders today.
For further information please contact:
Pantheon Leisure plc
Geoffrey Simmonds, Director
Tel: 020 7935 0823
Nominated Adviser
Dowgate Capital Advisers Limited
Liam Murray
Tel: 020 7492 4777
Broker
Dowgate Capital Stockbrokers Limited
Neil Badger
Tel: 01293 517 744
Public Relations
St Brides Media & Finance Limited
Isabel Crossley
Tel: 020 7236 1177
1. General Meeting
By way of Notice of GM, the Board is seeking authority to undertake the Capital
Reorganisation and the Capital Cancellation. The purpose of this letter is to
outline the reasons for seeking such authority and to explain why the Board
considers the Resolutions to be in the best interests of the Company and
Shareholders as a whole and why it recommends that Shareholders vote in favour
of the Resolutions at the GM.
Currently, the nominal value of the Company's Ordinary Shares is more than
their market value. If the Capital Reorganisation is approved at the GM, this
will have the effect of reducing the nominal share capital of the Company to
0.5p per New Ordinary Share thereby bringing the nominal value of the Company's
New Ordinary Shares below their market value. In order to maintain the same
number of fully participating Ordinary Shares after the Capital Reorganisation
as there were before such reorganisation, each Ordinary Share will be
sub-divided into one New Ordinary Share (fully participating) and one Deferred
Share (with limited rights). Further details of the Capital Reorganisation are
set out at paragraph 2 below.
Currently, the Company is not in a position to pay dividends or effect a
purchase of its own shares since its profit and loss account is in deficit. If
the Capital Cancellation is approved at the GM, a new reserve will be created
against which the Company expects to be able to eliminate all of the deficit in
its profit and loss account. Further details of the Capital Cancellation are
set out at paragraph 3 below.
Accordingly, set out at the end of this document is the Notice of GM convening
the GM to be held at the offices of Auerbach Hope, 58-60 Berners Street,
London, W1T 3JS at 10.00 a.m. on 19 August 2008.
2. Capital Reorganisation
The Board is proposing to undertake a reorganisation of the capital structure
of the Company. Currently the Company has one class of shares, the Ordinary
Shares. The number of Ordinary Shares currently in issue is 120,000,000.
It is proposed that each issued and unissued Ordinary Share be subdivided into
one New Ordinary Share and one Deferred Share. The Deferred Shares will have no
right to vote, only limited rights to participate in dividends and only limited
deferred rights on any return of capital (whether on a liquidation or
otherwise).
The rights attaching to the New Ordinary Shares will be identical in all
respects to those of the Ordinary Shares.
All Warrants and Options which have been granted and issued by the Company will
be adjusted in the same manner as the Ordinary Shares.
The auditors to the Company, Hazlewoods LLP, have confirmed to the Company that
following the Capital Reorganisation it is in their opinion fair and reasonable
that each Warrant will be adjusted such that it will entitle its holder to
subscribe for one New Ordinary Share at a subscription price of 3p per share.
The effect of the Capital Reorganisation will mean that the New Ordinary Shares
will have a nominal value of 0.5p each and the total number of New Ordinary
Shares held by Shareholders will be 120,000,000. The total number of Deferred
Shares held by Shareholders will be 120,000,000. No application will be made
for the Deferred Shares to be admitted to AIM or on any other recognised
investment exchange and no certificates in respect of the Deferred Shares will
be sent to Shareholders.
The Capital Reorganisation will be subject to Shareholder approval at the GM.
Existing share certificates for Ordinary Shares will remain valid following the
Capital Reorganisation.
3. Capital Cancellation
As at 31 December 2007, the Company had an accumulated deficit on its audited
profit and loss account of �331,187 and accordingly was, and currently remains,
unable to pay dividends. The deficit on the profit and loss account also
prevents the Company from being able to purchase its own shares. If no action
is taken, the Company will only be in a position to pay dividends or to
purchase its own shares after the deficit on its profit and loss account has
been eliminated by profits in excess of the deficit.
The Companies Act 1985 (as amended, restated or re-enacted by the Companies Act
2006) imposes limitations on the use of a company's capital reserves, including
its share premium account. A company may reduce its share premium account if it
is permitted to do so by its articles of association, it obtains the approval
of its Shareholders by the passing of a special resolution at a general meeting
and such cancellation is confirmed by the High Court and is registered at
Companies House. Accordingly, subject to the approval of the Shareholders at
the GM and the approval of the High Court, it is intended to implement the
Capital Cancellation.
The Capital Cancellation will comprise the cancellation of the amount standing
to the credit of the share premium account of the Company which, as at 31
December 2007, was �677,244. This will result in the creation of a new reserve
against which the Company expects to eliminate all of the deficit on its profit
and loss account. To the extent that the amount arising on the Capital
Cancellation exceeds the deficit on the Company's profit and loss account, the
balance will be available for distribution to Shareholders, subject to any
undertakings given to the High Court for the purpose of protecting the
Company's creditors at the date of the Capital Cancellation.
The Capital Cancellation will be subject to Shareholder approval at the GM and
is conditional on the High Court making an order confirming the cancellation.
The Capital Cancellation will become effective once the Court Order confirming
the cancellation is registered with the Registrar of Companies.
Prior to approving the proposed Capital Cancellation, the High Court will need
to be satisfied that the interests of the Company's creditors are not adversely
affected. The Company will put into place such form of creditor protection as
the High Court shall require.
The Directors of the Company reserve the right to abandon or discontinue any
application to the High Court if they believe that the terms required to obtain
confirmation are unsatisfactory to the Company.
4. Action To Be Taken By Shareholders
A circular will be posted to Shareholders today along with a Form of Proxy for
use at the GM. The Form of Proxy should be completed and returned in accordance
with the instructions printed thereon so as to arrive at the Company's
Registrars, Share Registrars Limited of Suite E, First Floor, 9 Lion and Lamb
Yard, Farnham, Surrey GU9 7LL as soon as possible and in any event not later
than 10.00 a.m. on 17 August 2008. Completion and return of the Form of Proxy
will not prevent Shareholders from attending and voting at the GM should they
so wish.
5. Recommendation
The Directors of the Company believe that the proposals are in the best
interests of the Company and Shareholders and recommend that Shareholders vote
in favour of the resolutions as the Directors intend to do in respect of their
aggregate holding of 12,000,000 Ordinary Shares representing approximately 10
per cent. of the current issued ordinary share capital of the Company.
6. Expected Timetable
Publication of circular and posting to 25 July 2008
Shareholders
Latest time and date for receipt of Form of 10:00 am on 17 August 2008
Proxy
General Meeting 10:00 am on 19 August 2008
Expected date of admission 20 August 2008
7. Definitions
"AIM" the AIM market of the London Stock Exchange plc;
"Capital Cancellation" the cancellation of the sum of �677,244 standing to
the credit of the share premium account of the
Company;
"Capital Reorganisation" the capital reorganisation of the Company as
detailed in paragraph 2 of this document pursuant to
which the issued and unissued Ordinary Shares will
be subdivided into the New Ordinary Shares and the
Deferred Shares;
"CREST" the relevant system (as defined in the Regulations)
in respect of which Euroclear UK & Ireland Limited
is the Operator (as defined in the Regulations);
"Company" Pantheon Leisure plc;
"Deferred Shares" deferred shares of 0.5p each in the capital of the
Company arising from the completion of the Capital
Reorganisation;
"Form of Proxy" the form of proxy for use by Shareholders in
connection with the GM;
"GM" or "General the general meeting of the Company convened for
Meeting" 10.00 a.m. on 19 August 2008, or any reconvened
meeting following any adjournment thereof, notice of
which is set out in the Notice of GM;
"New Ordinary Shares" ordinary shares of 0.5p each in the capital of the
Company arising from the completion of the Capital
Reorganisation;
"Notice of GM" the notice of the GM ;
"Options" options over Ordinary Shares;
"Ordinary Shares" ordinary shares of 1p each in the capital of the
Company;
"Regulations" The Uncertified Securities Regulations 2001 (SI 2001
No. 3755);
"Shareholders" holders of Ordinary Shares;
"Warrants" warrants to subscribe for Ordinary Shares
constituted under the warrant instrument of the
Company dated 12 September 2005 and which are
currently traded on AIM.
END
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