EIC Eicom

RNS Number:6021B
Eicom PLC
18 April 2006

Eicom PLC

18 April 2006

           Proposals for the subdivision, consolidation and reduction
      of the Company's Share Capital, the cancellation of deferred shares
              and reduction of the Company's Share Premium Account

Eicom Plc today sent out the following letter and EGM notice to shareholders

1.               INTRODUCTION

The directors of Eicom are proposing to reorganise the Company's share capital
in order to improve the Company's negotiating position in relation to any
possible future investment in the Company and to generally improve the
marketability of the Company's shares. Currently the market value of the
Company's shares is less than the nominal value of 0.5p per share and the Act
prohibits the Company from issuing shares at less than their nominal value.

The Directors are, therefore, recommending that:

(i)                   Each Existing Ordinary Share be subdivided into 1 Initial
Ordinary Share of 0.005p and 99 New Deferred Shares of 0.005p. New Deferred
Shares will, like the Existing Deferred Shares, not be admitted to AIM and will
have negligible value.

(ii)                 Every 100 Initial Ordinary Shares will then be consolidated
into one New Ordinary Share of 0.5p. Fractions arising from the consolidation
will be aggregated and sold in the market and the net sale proceeds will be
retained and applied for the benefit of the Company;

(iii)                Subject to Court Approval, the Company then proposes to
reduce its capital by cancelling both the New and Existing Deferred Shares and
the 58 remaining Initial Deferred Shares which will remain following the
Consolidation of the Initial Ordinary Shares;

(iv)                The Company's share premium account will be reduced by
#8,788,282. The reduction of share premium account is similarly subject to the
sanction of the Court.

The sums arising on the Reduction of capital and of Share premium account will
be carried to the profit and loss account, thus reducing the deficit which, at
30 June 2005 stood at #14,287,000.

(v)                 Subject to the Reduction of Capital taking effect, the
Company will then increase its Capital by amending Article 4 of its Articles of
Association. At the end of the reorganization process, the Company's capital
will be #30,000,000 divided into 6,000,000,000 ordinary shares of 0.5p each.

2. SUBDIVISION OF EXISITING ORDINARY SHARES

The Directors are recommending that every Existing Ordinary Share each with a
nominal value of 0.5p be subdivided into one Initial Ordinary Share with a
nominal value of 0.005p and 99 New Deferred Shares of 0.005p. This is the
subject of Resolution 1.1 set out in the attached Notice of EGM.

No certificates will be issued in respect of Initial Ordinary Shares or of New
Deferred Shares.

The New Deferred Shares will rank pari passu in all respects and have the same
rights as the Existing Deferred Shares.

3. CONSOLIDATION OF INITIAL ORDINARY SHARES

Following and conditional upon the subdivision of the Existing Ordinary Shares,
the proposal is that every 100 Initial Ordinary Shares then be Consolidate into
one New Ordinary Share of 0.5p.

This is the subject of Resolution 1.2 to be proposed at the EGM.

The New Ordinary Shares will rank pari passu in all respects and have the same
rights as the Existing Ordinary Shares.

Pursuant to power conferred by Article 48 of the Company's Articles, the Board
proposes to deal with fractional entitlements arising on the consolidation by
aggregating the fractions together and selling the resulting shares in the
market. The net sale proceeds will be distributed amongst such members as shall
be entitled to them, provided that entitlements of less than #5 per holding may
be retained for the benefit of the Company.

The Directors believe that this reconstruction of the Company's share capital
will increase the marketability of the Company's shares by providing a
significant differential between market price and nominal value.

4. THE REDUCTION OF CAPITAL

After the reorganisation proposed above, the Company will have in issue
44,909,791,542 New Deferred Shares of 0.005p each.

There will also be a remnant of about 58 Initial Ordinary Shares remaining
following the consolidation into new Ordinary Shares. It is proposed that these
also be cancelled.

There are also currently 707,750,000 Existing Deferred Shares of 0.5p in issue.
The Existing Deferred Shares were created following a reconstruction of the
Company's share capital on 7 December 2001.

The Deferred Shares do not entitle the holders to receive dividends or to vote
at general meetings of the Company, have no rights to any surplus on a winding
up of the Company, are not and will not be admitted to AIM and will have
negligible value.

Under the Act, a company may, with the sanction of a special resolution and the
consent of the Court reduce or cancel existing paid up share capital. It may
apply the sums resulting from such reduction in reducing the accumulated deficit
on the Company's profit and loss account.

This, therefore, is what the Board proposes in relation to the Deferred Shares,
the remnant of Initial ordinary Shares and the new Deferred Shares which they
consider represent paid up share capital which is lost or unrepresented by
available assets.

The cancellation of the new Deferred Shares and the Initial Ordinary Shares is
the subject of Resolution 2 and the cancellation of the Existing deferred Shares
is the subject of Resolution 3 set out in the Notice of EGM. Both will be
proposed as Special Resolutions.

5. REDUCTION OF THE SHARE PREMIUM ACCOUNT

Similarly, a company's ability to utilise its share premium account is very
limited. However, again with the sanction of a special resolution and with the
consent of the Court it is possible for a company to reduce its share premium
account and apply the sum which results in such reduction in further reducing
the accumulated deficit on the Company's profit and loss account.

The Company therefore proposes to reduce the share premium account by
#8,788,282, being the sum standing to the credit of the share premium account as
at the date of the last audited accounts of the Company of 30 June 2005, and to
carry that sum to its profit and loss account in order further to reduce the
deficit.

This is the subject of Resolution 4 set out in the attached Notice of EGM. This
Resolution will also be proposed as a Special Resolution.

Again, such reduction is subject to the approval of the Court. The Company
intends that an application will be made to the Court in due course both to
sanction the Reduction of Capital and the Reduction of share premium account.

6. THE SHARE CAPITAL REDUCTION

The Reduction of Capital and the reduction of the Company's Share Premium
Account will both only take effect if confirmed by the Court and upon the
appropriate documents being lodged with the Registrar of Companies. The Court
may require the Company to give an undertaking for the protection of the
Company's existing creditors and the Board anticipates that the Company will
give such an undertaking, if required.

7. INCREASE OF CAPITAL

Following completion of the reduction of capital, the Company's capital will
have been reduced by an aggregate sum in excess of #5million. The Company
therefore proposes to restore its capital to its former level of #30,000,000 to
take effect immediately upon the Reduction of Capital taking effect by the
creation of a sufficient number of new Ordinary Shares of 0.5p to achieve that
end. That, and the consequential alteration to clause 4 of the Company's
Articles of Association, is the subject of Resolution 5 in the Notice of EGM.

8. BENEFITS OF THE DIRECTORS' PROPOSALS

The Board considers that the proposed reorganisation of the Company's share
capital together with the Reduction of Capital and the reduction of the
Company's Share Premium Account have three principal benefits for the Company
and Shareholders.

Firstly, the increase in spread between nominal value and market price should
increase the marketability of the Company's Ordinary Shares.

Secondly, the cancellation of the Deferred Shares proposed as part of the
Reduction of Capital will simplify the Company's capital structure and balance
sheet making it more readily understandable both to Shareholders and potential
investors.

Thirdly, because the Reduction of Capital and the reduction of the Company's
share premium account by #8,788,282 will result in a substantial reduction in
the deficit on the Company's profit and loss account, the reduction of share
capital and share premium account will bring forward the date on which the
Company will have the ability to pay dividends to shareholders, if it makes
profits in the future.

9. EXTRAORDINARY GENERAL MEETING

All of the proposals set out in this circular require the approval of the
Shareholders. Accordingly, an EGM has been convened to be held at the Company's
Registered Office at 4 Farleigh Court, Long Ashton, Bristol BS48 1UL at 10.00 am
on 8 May 2006. At this meeting resolutions will be proposed to:

 1. subdivide the Existing Ordinary Shares into one Initial Ordinary Share and 99
    new Deferred Shares;
 2. consolidate every 100 Initial Ordinary Share into one New Ordinary Share of
    0.5p;
 3. cancel the remaining Initial Ordinary Shares, Existing Deferred Shares and
    New Deferred Shares;
 4. reduce the Company's share premium account by the sum of #8,788,282; and
 5. increase the Company's capital to its former level and amend the Company's
    Articles of Association accordingly.

10. TAXATION

The following is a brief summary of some of the UK taxation implications of the
courses of action described in the letter for the holders of Deferred Shares
who are resident for taxation purposes in the UK. The precise implications for
you will depend upon your particular circumstances and if you are in any doubt
as to your taxation position, or if you are subject to taxation in a
jurisdiction other than the UK, you should consult your professional adviser.
This section is not intended to be, and should not be construed to be, legal or
taxation advice to any particular holder of Deferred Shares.

The cancellation of the Deferred Shares will constitute a reorganisation of
capital for the purposes of the capital gains tax legislation but no liability
to capital gains tax should arise, because the holders of the Deferred Shares
will not have received any consideration for their disposal and will not be
deemed to have paid anything for the acquisition of the Deferred Shares.

11. RECOMMENDATION

The Directors consider that the above proposals are in the best interests of the
Company and Shareholders as a whole. Accordingly, the Directors unanimously
recommend Shareholders to vote in favour of the Resolutions.

The Directors and persons connected with them intend to vote in favour of the
Resolutions in respect of their holdings, in aggregate, of 29,035,851 Existing
Ordinary Shares (representing 6.4 per cent. of the issued ordinary share capital
of the Company as at the date of this document).


John Sanderson
Chairman


                                   Eicom PLC
       (Registered in England and Wales with Registered Number 03844023)

                    NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of Eicom PLC will
be held at the Company's Registered Office at 4 Farleigh Court, Long Ashton,
Bristol BS48 1UL on 8 May 2006 at 10.00 am for the purpose of considering and,
if thought fit, passing the resolutions set out below which will be proposed as
ordinary or special resolutions.

                              ORDINARY RESOLUTION

1               THAT:

1.1           Each 100 issued ordinary share of 0.5p each in the capital of the
Company be subdivided into 1 Initial Ordinary Share of 0.005p and 99 New
Deferred Shares of 0.005p;

1.2           Conditional upon and subject to Resolution 1.1 being duly passed,
that each Initial Ordinary Share so created be consolidated into 1 new Ordinary
Share of 0.5p;

                              SPECIAL RESOLUTIONS

2               Subject (i) to Resolution 1 being duly passed and (ii) to the
confirmation of the Court, that the capital of the Company be reduced (a) by
cancelling and extinguishing altogether the Initial Ordinary Shares remaining
following the Consolidation resolved upon by resolution 1.2 above and (b) by
extinguishing altogether all the Deferred Shares arising as a result of the
sub-division resolved upon by resolution 1.2 above.

3               Subject to the confirmation of the Court, that the capital of
the Company be reduced by cancelling and extinguishing altogether the
707,750,000 Deferred Shares of 0.5p each arising as a result of the
reorganisation of the Company share capital on 7 December 2001.

4               Subject to the confirmation of the Court, that the amount
standing to the credit of the share premium account of the Company be and is
hereby reduced by the sum of #8,788,282.

5               That, subject to and conditional upon the reduction of the
Company's capital resolved upon by Resolutions 2 and 3 hereof coming into
effect:-

5.1           the capital of the Company be thereupon increased by the creation
of such number of Ordinary Shares of 0.5p each as shall restore the Company's
capital to its former level of #30,000,000; and

5.2           the Articles of Association of the Company be amended by the
substitution for the existing Article 4 the following Article:

"4. The capital of the Company is #30,000,000 divided into 6,000,000,000
ordinary shares of 0.5p each ("Ordinary Shares")."


By Order of the Board
PD Fowler
Secretary
Dated 12 April 2006

Notes:

1. A member entitled to attend and vote at the Extraordinary General Meeting may
appoint one or more proxies to attend and, on a poll, to vote instead of him. A
proxy need not be a member of the Company.

2. A form of proxy is enclosed. To be valid, the form of proxy (together with
the power of attorney or other authority (if any) under which it is signed or a
notarially certified copy of such authority) must be deposited at the Company's
registrars, Capita Registrars, 34 Beckenham Road, Beckenham, Kent BR3 4TU no
later than 48 hours before the commencement of the meeting. Completion of the
form of proxy will not preclude a member from attending and voting in person.

3. The Company, pursuant to regulation 41 of The Uncertified Securities
Regulations 2001, specifies that only those shareholders registered in the
register of members of the Company as at 5.00 pm on 6 May 2006 shall be entitled
to attend or vote at the Extraordinary General Meeting in respect of the number
of shares registered in their name at that time. Changes to entries on the
relevant register of securities after that time will be disregarded in
determining the rights of any person to attend or vote at the Extraordinary
General Meeting.


                                  DEFINITIONS

In this announcement, the following expressions shall (unless the context
requires otherwise) have the following meanings:

"Act"            the Companies Act 1985, as amended
"AIM"            The Alternative Investment Market of the London Stock Exchange
"Company" or     Eicom PLC
"Eicom"
"Court"          The High Court of Justice in England and Wales
"Directors" or   the directors of the Company as listed on page 3 of this
"Board"          document
"Existing        the 707,750,000 deferred shares of 0.5p each in the capital of
Deferred Shares" the Company in issue at the date of this document
"Existing        the existing issued and unissued ordinary shares of 0.5p each
Ordinary Shares" in the Company at the date of this document
"Extraordinary   the extraordinary general meeting of the Company to be held at
General Meeting" the Company's Registered Office at 4 Farleigh Court, Long
or "EGM"         Ashton, Bristol BS48 1UL at 10.00 am on 8 May 2006 notice of
                 which is set out in this document
"Form of Proxy"  the form of proxy accompanying this document for use by
                 Shareholders of the Company in connection with the EGM
"Initial         the ordinary shares of 0.005p each in the Company to be created
Ordinary Shares" by the subdivision of the Existing Ordinary Shares
"London Stock    London Stock Exchange plc
Exchange"
"New Deferred    the new Deferred Shares of 0.005p each in the capital of the
Shares"          Company created by the subdivision of the Initial Ordinary
                 Shares
"New Ordinary    the new Ordinary Shares of 0.5p each in the capital of the
Shares"          Company created by the consolidation of the Initial Ordinary
                 Shares
"Ordinary        together the Existing Ordinary Shares and the New Ordinary
Shares"          Shares
"Proposals"      the proposals set out in this document including the
                 Reorganisation and the Reduction of Capital
"Reduction of    the proposed cancellation of the Existing Deferred Shares,
Capital"         certain Initial Ordinary Shares and the New Deferred Shares the
                 subject of the Proposals
"Reorganisation" the proposed reorganisation of the company's share capital
"Resolutions"    the resolutions to be proposed as ordinary resolutions or
                 special resolutions as the case may be at the EGM as detailed
                 in the notice at the end of this document
"Shareholder(s)" holder(s) of Existing Ordinary Shares







                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
NOEAKFKNNBKDKQD

Eicom (LSE:EIC)
Historical Stock Chart
From Jun 2024 to Jul 2024

Eicom (LSE:EIC)
Historical Stock Chart
From Jul 2023 to Jul 2024