Karelian Diamond Res. Capital Reorganisation
November 17 2016 - 2:00AM
UK Regulatory
TIDMKDR
17 November 2016
Karelian Diamond Resources Plc
("KDR" or the "Company")
PROPOSED CAPITAL REORGANISATION
INTRODUCTION
The Company are proposing the Capital Reorganisation to be voted on by
Shareholders at the Annual General Meeting of the Company to be held at 12.00
noon. on 9 December 2016. Notice of the AGM, which includes details of the
Special Resolution, and a form of proxy for use at the AGM have today been
posted to Shareholders. The Special Resolution will be passed if at least 75
per cent. of the votes cast are in favour. A copy of the Circular has been
published on the Company's website.
BACKGROUND TO AND REASONS FOR THE PROPOSED REORGANISATION
The Company's Ordinary Shares have recently traded at a discount to their
nominal value of EUR0.01. As the Company cannot issue shares at a discount to the
nominal value, the Board is proposing the Capital Reorganisation. Accordingly,
Shareholders will be asked at the AGM to approve a sub-division of the
Company's Existing Ordinary Shares which will have the effect of reducing the
nominal value of the issued and unissued ordinary share capital of the Company.
The Capital Reorganisation involves subdividing each issued Existing Ordinary
Share of EUR0.01 each into one Ordinary Share of EUR0.00001 each and one Deferred
Share of EUR0.00999 each and sub-dividing each of the unissued Existing Ordinary
Shares into 1,000 Ordinary Shares of EUR0.00001. Immediately following the
Capital Reorganisation, each existing Shareholder will hold 1 New Ordinary
Share and 1 Deferred Shares in place of each Existing Ordinary Share. Existing
certificates representing the Existing Ordinary Shares will remain valid. No
share certificates will be issued for the Deferred Shares.
Following the Capital Reorganisation, and assuming no further Existing Ordinary
Shares are issued between the date of this Circular and the Capital
Reorganisation becoming effective, the issued share capital will comprise
317,785,034 Ordinary Shares and 317,785,034 Deferred Shares, and the value of
the paid-up share capital will remain EUR3,177,850.34.
DEFERRED SHARES
The Deferred Shares will have no right to vote, attend or speak at general
meetings of the Company and will have no right to receive any dividend or other
distribution and will have only limited rights to participate in any return of
capital on a winding-up or liquidation of the Company, which will be of no
material value. No application will be made to the London Stock Exchange or the
Irish Stock Exchange for admission of the Deferred Shares to trading on AIM or
the ESM. The New Ordinary Shares will retain all the rights of the Existing
Ordinary Shares.
RECOMMENDATION
The Directors consider Capital Reorganisation to be in the best interests of
the Company and of Shareholders as a whole. Accordingly, the Directors
unanimously recommend that Shareholders vote in favour of the Special
Resolution to be proposed at the Annual General Meeting, as they intend to do
in respect of their own beneficial holdings of 88,176,010 Existing Ordinary
Shares representing 27.75 per cent. of the Existing Ordinary Shares in issue.
Further Information:
Professor Richard Conroy, Chairman, Karelian Diamond Tel: +353-1-661-8958
Resources plc
David Hart / James Thomas / Nick Harriss, Allenby Tel: +44-20-3328-5656
Capital Limited (Nomad)
Ger Heffernan / Jan Fitzell, IBI Corporate Finance Tel: +353-7662-34800
Limited (ESM Adviser)
Jon Belliss / Elliot Hance, Beaufort Securities Limited Tel: +44-20-7382-8300
(Broker)
Michael Padley, Lothbury Financial Services Limited Tel: +44-20-3290-0707
Don Hall, Hall Communications Tel: +353-1-660-9377
www.kareliandiamondresources.com
DEFINITIONS
The following definitions apply throughout this document, unless the context
otherwise requires:
"AIM" the AIM Market, a market operated by
London Stock Exchange;
"Annual General Meeting" or "AGM" the Annual General Meeting of the
Company to be held on 9 December 2016
at 12.00 noon, notice of which
accompanies the Circular;
"Board" or "Directors" the board of directors of the Company;
"Capital Reorganisation" the sub-division and reclassification
of each of the Existing Ordinary
Shares in issue into one New Ordinary
Share and one Deferred Share;
"Circular" this circular to Shareholders of the
Company;
"Companies Act" or "Act" the Companies Act 2014;
"Company" or "Karelian" Karelian Diamond Resources plc;
"Deferred Shares" the deferred shares of EUR0.00999 each
in the capital of the Company to be
created by the Special Resolution;
"ESM" the Enterprise Securities Market, a
market operated by The Irish Stock
Exchange;
"Existing Ordinary Shares" the existing ordinary shares of EUR0.01
each in the capital of the Company;
"Form of Proxy" the form of proxy for use at the
Annual General Meeting enclosed with
this Circular;
"Irish Stock Exchange" the Irish Stock Exchange Limited;
"London Stock Exchange" the London Stock Exchange plc;
"New Ordinary Shares" the new ordinary shares of EUR0.00001
each in the capital of the Company
following the Capital Reorganisation
"Shareholders" holders of Existing Ordinary Shares
"Special Resolution" the special resolution to be proposed
at the Annual General
Meeting being Resolution No.4 in the
Notice of the Annual General Meeting
dated 16 November 2016
END
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