Kenmare Resources Proposed Capital Reduction And Notice Of Extraordinary General Meeting

 
TIDMIRSH 
 
 
   Kenmare Resources plc ("Kenmare" or "the Company") 
 
   6 November 2018 
 
   Proposed Capital Reduction 
 
   and 
 
   Notice of Extraordinary General Meeting 
 
   Kenmare Resources plc ("Kenmare" or the "Company") announces that it 
will later today post a circular (the "Circular") to shareholders of the 
Company ("Shareholders") detailing a proposed capital reduction of the 
Company's share premium account (the "Capital Reduction") and convene a 
general meeting of the Company (the "General Meeting"), the purpose of 
which is to enable shareholders to approve the Capital Reduction. 
 
   The General Meeting will be held at Conrad Dublin, Earlsfort Terrace, 
Dublin 2, D02 V562 on Wednesday, 5 December 2018 at 12.30 p.m. 
 
   Background to and reasons for the proposed capital reduction 
 
   Following a period of continued growth and operational development, 
Kenmare announced on 16 October 2018 a dividend policy to return a 
minimum of 20% of profit after tax on an annual basis to Shareholders as 
part of our objective to create and deliver shareholder value. This 
policy is subject to prevailing product market conditions and ensuring 
that the Company retains a prudent level of cash to fund debt and 
capital requirements. 
 
   In light of the capital required for development projects, the Company 
expects (subject to Shareholder and High Court approval of the Capital 
Reduction) to pay modest dividends during the next two years, starting 
with an interim dividend based on H1 2019 results, payable in H2 2019. 
Following completion of these development projects, the Company expects 
to be in a position to make higher capital returns from 2021. 
 
   As we stated in our October announcement, the Company, in order to be in 
a position to pay any dividend, must first eliminate its historic losses 
by reduction of its capital. The Company carries an accumulated deficit 
on its balance sheet (US$185,252,950 at 30 June 2018) reflecting 
accumulated losses on its activities since its incorporation. Under 
Irish company law, the Company is precluded from paying dividends, or 
(subject to certain exceptions) redeeming or repurchasing its shares, 
while it carries an accumulated deficit. A reduction of the Company's 
capital to eliminate historic losses requires the approval of 
Shareholders and the consent of the High Court. 
 
   Accordingly, the Board proposes the Capital Reduction to eliminate that 
deficit and to provide the Company with the flexibility to pay dividends, 
or to redeem or repurchase its shares, in the future and in line with 
its dividend policy. 
 
   The Capital Reduction will not, of itself, create distributable reserves 
that would allow the Company to pay a dividend (or redeem or repurchase 
its shares). However, it would put the Company in a position to pay a 
dividend (or redeem or repurchase its shares) in circumstances where 
distributable reserves are created in future financial years and the 
Board determines that such reserves, when assessed alongside the ongoing 
financial performance of the Company and the interests of the Company 
generally at such time, are of such an amount as to justify payment of a 
dividend or other distribution. 
 
   If approved by Shareholders, and subsequently confirmed by the High 
Court of Ireland, the Capital Reduction will result in the partial 
cancellation of the Company's share premium account and will eliminate 
the deficit on the Company's profit and loss account as at 30 June 2018. 
 
   The Circular (including the notice of EGM) will be shortly available on 
the Company's website, www.kenmareresources.com. 
 
   Copies of the Circular (including the notice of EGM) have been submitted 
to Euronext Dublin and the National Storage Mechanism from where it may 
also be obtained. 
 
   Capitalised terms used but not otherwise defined in this announcement 
will have the same meanings given to them within the Circular. 
 
   For further information, please contact: 
 
   Kenmare Resources plc 
 
   Michael Carvill, Managing Director 
 
   Tel: +353 1 671 0411 
 
 
   Tony McCluskey, Financial Director 
 
   Tel: +353 1 671 0411 
 
 
   Jeremy Dibb, Corporate Development and Investor Relations Manager 
 
   Tel: +353 1 671 0411 
 
   Mob: + 353 87 943 0367 
 
   Murray 
 
 
   Joe Heron / Aimee Beale 
 
 
   Tel: +353 1 498 0300 
 
 
   Mob: +353 87 690 9735 
 
 
   Buchanan 
 
   Bobby Morse / Chris Judd 
 
   Tel: +44 207 466 5000 
 
   Forward Looking Statements 
 
   This announcement contains some forward-looking statements that 
represent Kenmare's expectations for its business, based on current 
expectations about future events, which by their nature involve risks 
and uncertainties. Kenmare believes that its expectations and 
assumptions with respect to these forward-looking statements are 
reasonable. However, because they involve risk and uncertainty, which 
are in some cases beyond Kenmare's control, actual results or 
performance may differ materially from those expressed or implied by 
such forward-looking information.
(END) Dow Jones Newswires
November 06, 2018 02:00 ET (07:00 GMT)
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