UCG United Carpets Group Plc

TIDMUCG

RNS Number : 1651N

United Carpets Group plc

24 July 2014

UNITED CARPETS GROUP plc

PROPOSED CAPITAL RESTRUCTURING

United Carpets Group plc ("the Group" or "the Company" or "United Carpets"), the second largest chain of specialist retail carpet and floor covering stores in the UK, has today posted to shareholders a circular setting out details of a proposed reduction of the issued share capital and proposed cancellation of the share premium account.

The Board considers it highly desirable that the Company has the maximum flexibility to consider the payment of dividends and otherwise return value to shareholders. However, the Company is generally precluded from the payment of any dividends or other distributions or the redemption or buy-back of its shares in the absence of sufficient distributable reserves (and the share premium account can be applied by the Company only for limited purposes).

It is proposed that the nominal amount of each of the 81,400,000 issued and fully paid ordinary shares of 5.0 pence each in the capital of the Company be reduced to 1.0 pence per share and that all of the share premium account be cancelled ("Capital Reduction").

The purpose of the Capital Reduction is to eliminate the deficit on the Company's profit and loss account and to create distributable reserves in the Company to facilitate the future consideration of payment of dividends to shareholders, where justified by the profits of the Company, or to allow the redemption or buy-back of the Company's shares. As the Company currently has negative distributable reserves, in order for the Company to have the ability to return money to shareholders including by way of dividends or carrying out buy backs of the Company's shares (if considered appropriate), it is necessary to effect the Capital Reduction.

If the Capital Reduction is approved by shareholders at the General Meeting, it will be subject to the scrutiny of, and confirmation by, the High Court and, subject to that confirmation and registration by the Registrar of Companies of the order of the High Court, is expected to take effect in September 2014. Assuming that there is no material change in the financial position or prospects of the Company, and subject to any undertakings which the Company may be required to offer the High Court for the protection of creditors, the Board anticipates that the Capital Reduction will result in the creation of distributable reserves of approximately GBP4,362,000. Once the retained earnings deficit is extinguished the sum of up to GBP944,000 will be potentially available for the purposes set out in the paragraph above.

Following the Capital Reduction, there will be 81,400,000 ordinary shares of 1.0 pence each in the Company in issue.

The General Meeting of the Company is to be held at 12.00 midday on Wednesday 20 August 2014 at the offices of the Company. The General Meeting is being held for the purpose of considering and, if thought fit, passing the resolution to approve the Capital Reduction ("Resolution").

A summary and explanation of the Resolution is set out in the circular being posted to shareholders today and available on the Company's website www.unitedcarpetsandbeds.com.

Enquiries:

 
 United Carpets Group plc 
  Paul Eyre, Chief Executive 
  Ian Bowness, Finance Director 
                                                        01709 732 666 
  Novella Communications Ltd 
  Tim Robertson 
  Ben Heath                                             020 3151 7008 
 Cantor Fitzgerald Europe 
  Mark Percy/Catherine Leftley (Corporate Finance) 
  David Banks/Paul Jewell (Corporate Broking)           020 7894 7000 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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