Castleton Technology PLC Proposed Reduction of Capital and Notice of GM (0553A)
September 07 2018 - 2:00AM
UK Regulatory
TIDMCTP
RNS Number : 0553A
Castleton Technology PLC
07 September 2018
Castleton Technology PLC
("Castleton", the "Company" or the "Group")
Proposed Reduction of Capital
Notice of General Meeting
Castleton Technology plc (AIM: CTP), the software and managed services provider to the public
and not-for-profit sectors, announces that the Company will later today post a circular (the
"Circular") to shareholders of the Company (the "Shareholders") detailing:
* a proposed cancellation of the Company's share
premium account (the "Reduction of Capital");
* a proposed disapplication of pre-emption rights in
the Company; and
* a general meeting of the Company (the "General
Meeting"), the purpose of which is to enable
Shareholders to approve the Resolutions.
A copy of the Circular will shortly be available on the Company's website at www.castletonplc.com/investors/.
Below are extracts from the Circular which should be read in conjunction with the full text.
Defined terms used in this announcement have the meaning ascribed to them in the Circular.
Background to and reasons for the Reduction of Capital
The Companies Act 2006 (the "Act") only permits a company to make distributions to its Shareholders
out of its profits available for that purpose. In addition, a public company may fund a purchase
of its own shares out of distributable profits. Such profits are, broadly, a company's accumulated
realised profits so far as not previously utilised by distribution or capitalisation, less
its accumulated realised losses.
As at 31 March 2018, the Company had an accumulated deficit on its profit and loss account
of GBP9,775,000. Accordingly, as matters currently stand, the Company does not have distributable
profits and is therefore unable to make any distributions to its Shareholders or fund a purchase
of its own Ordinary Shares out of distributable profits. However, at the same time, there
was GBP17,006,000 standing to the credit of the Company's share premium account.
Since 31 March 2018, the Company has allotted 1,432,706 Ordinary Shares at a price of GBP0.8275
per Ordinary Share, 738,896 Ordinary Shares at a price of GBP0.856 per Ordinary Share and
271,000 Ordinary Shares at a price of GBP0.22 per Ordinary Share. As at the date of the Circular,
there is GBP18,835,000 standing to the credit of the Company's share premium account.
The Directors therefore feel it is appropriate to seek Shareholder approval to effect the
Reduction of Capital and, subject to the approval of the Shareholders and of the Court, to
cancel the Company's share premium account.
The Directors then propose to apply the reserve arising on the Reduction of Capital to eliminate
the Company's accumulated deficit on its profit and loss account and, as to the balance, to
create distributable profits on the balance sheet of the Company. The Directors believe that,
subject to the future performance of the Company, this should give the Company the ability
to make distributions to Shareholders and/or buy back its own Ordinary Shares in the future
if and when the Directors may consider that it is appropriate to do so. However, the Directors
cannot give any guarantee either that the Company will make any distributions or purchases
of its own Ordinary Shares or as to the size of any distributions or purchases of its own
Ordinary Shares which may be made.
The cancellation of the Company's share premium account will only become effective if (in
the following order):
(i) Resolution 1 as set out in the Notice of General Meeting is approved by Shareholders at
the General Meeting;
(ii) confirmation is given by the Court; and
(iii) the Court order and a statement of capital are delivered to and registered by Companies
House.
As noted above, the cancellation of the Company's share premium account should enable the
Directors to eliminate the current deficit on the Company's profit and loss account and create
distributable profits.
Effect of the Reduction of Capital
Subject to approval by the Shareholders and obtaining the Court's consent, the amounts resulting
from the cancellation of the Company's share premium account will be credited to the Company's
profit and loss account to create (subject to the Court's confirmation) distributable profits
that the Company will be able to use when making any future distributions to Shareholders
or purchases of its own Ordinary Shares.
The Reduction of Capital does not involve any distribution or repayment of capital or share
premium by the Company and will not reduce the underlying net assets of the Company.
Authority to Disapply Pre-Emption Rights
As stated in the announcement made by the Company on 24 July 2018, resolution 9 as set out
in the notice of annual general meeting dated 29 June 2018 (being the resolution to approve
a general disapplication of pre-emption rights in respect of the issue of up to 15 per cent.
of the Company's issued ordinary share capital on an unrestricted basis) was withdrawn prior
to the start of the annual general meeting and not put to Shareholders. The Directors are
therefore proposing at the forthcoming General Meeting a general disapplication of pre-emption
rights resolution in respect of the issue of up to 5 per cent. of the Company's issued ordinary
share capital on an unrestricted basis and a specific disapplication of pre-emption rights
resolution in respect of the issue of up to an additional 5 per cent. of the Company's issued
ordinary share capital in connection with an acquisition or specified capital investment.
Having consulted with Shareholders of the Company, the Board believes this smaller authority
is more appropriate given the future plans of the Company.
General Meeting
A notice convening a General Meeting of the Company, to be held at the offices of DAC Beachcroft
LLP at 100 Fetter Lane, London EC4A 1BN on 24 September 2018 at 11.00 a.m. and at which the
Resolutions will be proposed, is set out at the end of the Circular.
Resolution 1 to approve the Reduction of Capital and Resolutions 2 and 3 to approve the disapplication
of pre-emption rights will be proposed as special Resolutions requiring a majority of not
less than 75 per cent. of the votes cast.
Directors' recommendation
The Directors consider that the Resolutions are in the best interests of the Company and would
promote the success of the Company for the benefit of its Shareholders as a whole. Accordingly,
the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to
be proposed at the General Meeting as they and their immediate families and connected persons
(within the meaning of section 252 of the Act) intend to do in respect of their aggregate
holdings of 390,399 Ordinary Shares representing approximately 0.48 per cent. of the existing
share capital of the Company.
Expected Timetable of Principal Events 2018
Date of the Circular 7 September
Latest time and date for receipt of Forms 11.00 a.m. on 20
of Proxy September
General Meeting 11.00 a.m. on 24
September
Court hearing of application to confirm 23 October
the Reduction of Capital
Effective Date of the Reduction of Capital 23 October
The dates and times given in the Circular are based on the Company's current expectations
and may be subject to change. If any of the details contained in the timetable above should
change, the revised times and dates will be notified to Shareholders by means of an announcement
through a Regulatory Information Service. All references to time and dates in the Circular
are to time and dates in London.
Enquiries: Castleton Technology plc Tel. +44 (0)845
Dean Dickinson, Chief Executive Officer 241 0220
Haywood Chapman, Chief Financial Officer
finnCap Ltd Tel. +44 (0)20
Jonny Franklin-Adams / Simon Hicks (Corporate 7220 0500
Finance)
Andrew Burdis (ECM)
MXC Capital Markets LLP Tel. +44(0)20 7965
Charlotte Stranner 1849
Alma PR Tel. +44(0) 7780
Rebecca Sanders-Hewett / Helena Bogle 901979
About Castleton Technology plc
Castleton Technology plc is a leading supplier of complementary
software and managed services to the public and not-for-profit
sectors. The Group is a 'one stop shop', providing integrated
housing systems via the Cloud, working in partnership with its
customers and resellers to help drive efficiencies whilst improving
controls and customer service. www.castletonplc.com
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS, the news service of the
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contact rns@lseg.com or visit www.rns.com.
END
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