TIDMETQ
RNS Number : 6405I
Energy Technique PLC
27 July 2012
ENERGY TECHNIQUE PLC
(the "Company")
Proposed Capital Reorganisation and Reduction of Capital
Notice of General Meeting
The Company is pleased to announce that, in line with its
statement in the Annual Report and Financial Statements for the
year ended 31 March 2012 that the Board was currently considering
how best to implement a corporate restructuring which would inter
alia enable the Company to pay dividends in the future, the Company
has today posted a circular to shareholders (the "Circular"). The
Circular convenes a General Meeting (the "General Meeting") at
which it will propose Resolutions to implement a capital
reorganisation and reduction of capital of the Company, which will
at the same time reduce the administration costs of the
Company.
The Company currently has over 1,800 registered Shareholders. It
has become clear to the Directors that for a company of its size it
is not in the Company's interests to continue to bear the costs and
administrative burden of such a large shareholder base. The number
of small Shareholders adds a considerable cost to the overheads of
the Company caused by the need to produce annual accounts and
registrar's costs. Over 40 per cent. of Shareholders have holdings
of no more than 200 Existing Ordinary Shares, each with a value (at
the closing mid-market price on 26 July 2012 of 5.38pence per
share) of GBP10.76 or less. The Directors have been informed that
the costs which would be incurred by a shareholder on a sale of
such a holding would almost certainly exceed the gross proceeds of
sale.
The Articles of Association of the Company permit the Company,
by ordinary resolution, to consolidate its share capital into
shares of a larger amount than its existing shares. Article 43
permits the Board, on consolidation, to settle any difficulties
arising on consolidation as it thinks fit and, without prejudice to
the generality of that power, in relation to fractions, to sell the
shares representing the fractions at such time and at such price as
it may think fit to any person and requires the Company to
distribute the net proceeds of sale provided that the Board may
determine that no member shall be entitled to receive such net
proceeds of sale if his entitlement does not exceed GBP3.00.
Accordingly, the Directors have resolved to submit to
shareholders proposals for a capital reorganisation (the "Capital
Reorganisation") by the following steps:
(a) the 33,305,160 issued Existing Ordinary Shares will be
consolidated into 166,526 new ordinary shares of GBP12.50 each in
the capital of the Company and the authorised but unissued Existing
Ordinary Shares of 6.25p each will be cancelled;
(b) the 166,526 new ordinary shares of GBP12.50 each will be
subdivided into new ordinary shares of 62.5p each creating
3,330,516 Ordinary Shares of 62.5p each in the capital of the
Company;
(c) each of the issued ordinary shares of 62.5p each resulting
from the subdivision will be further subdivided and redesignated
into 3,330,516 New Ordinary Shares of 10p each and 3,330,516
Deferred Shares of 52.5p each;
The rights attaching to the New Ordinary Shares will, apart from
the change in nominal value and therefore the entitlement of
Shareholders in respect of a return of capital arising from them,
be identical in all respects to those of the Existing Ordinary
Shares.
The result of the Capital Reorganisation will be to reduce the
number of Ordinary Shares in issue from 33,305,160 Existing
Ordinary Shares to 3,330,516 New Ordinary Shares and the number of
shareholders from approximately 1,840 to approximately 1,040.
It will be noted that the percentage shareholding of any
shareholder currently holding at least 200 existing shares will not
be affected by the Capital Reorganisation.
At 31 March 2012, the Company had an accumulated deficit on its
profit and loss account of GBP7,592,000. Whilst the balance on the
Company's profit and loss account remains in deficit, the Company
cannot declare a dividend due to prohibitions under the Act.
In these circumstances, the Company proposes, subject to
approval by Shareholders, to apply to the Companies Court to
confirm the cancellation of both the existing Deferred Shares and
also the Deferred Shares created as a result of the Capital
Reorganisation, as well as to cancel the amount standing to the
credit of the Company's share premium account as at 31 March 2012,
being GBP3,422,000 (the "Reduction"). The total reserve arising on
the cancellation of the Deferred Shares when added to the amount
arising on the cancellation of share premium account would be
approximately GBP7,441,000.
There is also in the Balance Sheet a reserve of GBP2,336,000,
created in 2001 which was the last occasion on which the Company
implemented a reduction in share capital approved by the Court.
That reserve was created as part of the Court approval process in
order to safeguard the position of the Company's creditors at the
date of that reduction of capital. The Directors are satisfied that
all sums owing to such creditors have been discharged in full and
that accordingly the reserve may now be regarded as a distributable
reserve. This reserve would reduce the deficit on the Company's
distributable reserves to GBP5,256,000.
It is intended that the combined reserve arising on the
Reduction will be utilised in eliminating the accumulated deficit
on the Company's distributable reserves and, subject to the
protection of creditors (as to which see below), creating a surplus
on the Company's profit and loss account, which could be up to
GBP2,185,000.
If approved by Shareholders the Company will, as soon as
practicable, apply to the High Court for an appropriate Court
Order. It is expected the Court Order confirming the Reduction
would be made in September 2012. The Reduction would take effect
once the Court Order was registered with Companies House, which it
is anticipated would take place within a few days of the Order
being made ("the Effective Date").
The Court will be concerned to ensure that the interests of
creditors as at the Effective Date are not prejudiced. It is
presently anticipated that the consent of all existing creditors of
the Company to the reduction will be obtained. However, the Company
will provide such protection for creditors as the Court requires
and the Company is advised is appropriate. For that reason the
Company is unable to guarantee that the entirety of the reserve
arising on the Reduction will be immediately distributable.
In the preliminary announcement of trading results released on
14 June 2012, the Chairman referred to the Company's return to
profitability in the year ended 31 March 2012. The combination of
increased sales and tight cost control produced a Group profit on
Continuing Operations before tax of GBP173,000, after charging
Central costs, representing a turnaround from the losses of
GBP396,000 incurred in the previous year. This was a pleasing
trading performance achieved in challenging trading conditions.
The Chairman also referred to the Board's intention to seek
approval from shareholders in connection with a share
reorganisation and application to the Court for a capital
reduction, so as to allow the Company to pay dividends in the
future. When the preliminary results were announced, the expected
timetable for completion of the Capital Reorganisation and the
Reduction was around October 2012 and it was indicated that if
trading continues at current levels, the Board may consider
declaring a dividend at that time.
As indicated above, subject to the Court's requirements in
relation to the protection of creditors, a distributable reserve of
up to GBP2,185,000 may result from the Reduction.
The General Meeting to consider the Capital Reorganisation and
the Reduction is to be held at 35 Park Lane, London W1K 1RB at
12:30 pm on Thursday 16 August 2012, when the Resolutions set out
in the Notice of General meeting forming part of the Circular will
be proposed.
Shareholders are requested to complete the Form of Proxy
enclosed with the Circular in accordance with the instructions
printed on it and to return it to the Registrars as soon as
possible and, in any event, so as to be received by no later than
12.30 p.m. on 14 August 2012.
The completion and return of the Form of Proxy will not preclude
shareholders from attending the General Meeting and voting in
person.
The Board considers that the Capital Reorganisation and the
Reduction are in the best interests of the Company and that the
terms are fair and reasonable as far as the Shareholders are
concerned. Accordingly, the Board, unanimously recommends that
shareholders vote in favour of the Resolutions as they have
undertaken to do in respect of their own shareholdings representing
in aggregate 3.3% of the Existing Ordinary Shares.
Further details are set out in the Circular which has been
posted to Shareholders today and which together with the Form of
Proxy is also available to download from the Company's website
www.diffusion-group.com
Capitalised terms used in this announcement but not defined have
the meanings given to them in the circular posted to shareholders
today.
Expected timetable of events:
Posting of the Circular to Shareholders 27 July 2012
Latest time and date for receipt of proxies 14 August 2012 (12.30pm)
General Meeting 16 August 2012 (12.30pm)
Record Date for the Capital Reorganisation 16 August 2012 (6.00pm)
Cancellation of existing Ordinary Shares 17 August 2012 (7.30am)
Admission to trading of New Ordinary Shares 17 August 2012 (8.00am)
CREST accounts credited with New Ordinary Shares 17 August 2012
New shares certificates despatched by 31 August 2012
For further information please visit www.diffusion-group.com or
contact:
Contacts:
Walter Goldsmith, Chairman, Energy Technique Plc: 020 8783
0033
Rob Unsworth, Company Secretary, Energy Technique Plc: 020 8783
0033
Ed Frisby/Ben Thompson, finnCap Limited (Nominated Advisor): 020
7220 0500
Notes for Editors:
With over 50 years in the Heating and Ventilation industry,
Energy Technique's operating company Diffusion is one of the oldest
and most established manufactures of Heating, Ventilation and Air
Conditioning products in the UK. Diffusion is a market leader in
the manufacture of premium quality fan coils and commercial heating
products. The Diffusion and Energy Technique brand names are
recognised as highly engineered, quality products providing leading
edge performance and energy efficiency.
Diffusion has been involved with many challenging and
prestigious projects across a spectrum of sectors including hotels,
commercial offices, retail, schools, hospitals, and residential.
Diffusion has established excellent working relationships with many
blue chip clients including Land Securities, Marks & Spencer,
Boots, City Inn Hotels, Stanhope Properties and many more. All
products are designed, developed and manufactured at Diffusion's
30,000 sq. ft. manufacturing facility in West Molesey, Surrey,
offering the best possible products, designed specifically to meet
customers' bespoke requirements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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