28th Jan 2015 15:51
LONDON (Alliance News) - Galileo Resources PLC Wednesday set a shareholder meeting for February, asking its investors to vote through a reorganisation of its share issue and the creation of deferred shares.
Galileo's shares have been trading below their nominal value of 5 pence a share, which isn't allowed under English company law and also prevents Galileo from raising new funds by issuing more equity.
It therefore wants to boost its share price so that it would be able to raise new equity funding, and is proposing to do that by creating deferred shares.
Its market capitalisation was GBP5.7 million at the close on Tuesday, divided into just over 114.5 million shares. It now wants to sub-divide each of those shares into one new share with a nominal value of 0.1 pence and one deferred share of 4.9 pence.
This will mean, an investor's proportional interest in the company's shares will remain the same, as will the investor's aggregate value of their holding.
The deferred shares won't be traded on AIM and will be effectively valueless as they will not carry any rights to vote or dividend rights. Holders of deferred shares will only be entitled to a payment on a return of capital or on a winding up of the company after each of the holders of ordinary shares have received a payment of GBP1 million on each such share.
The company will hold a general meeting on February 15 to allow shareholders to vote on the proposal.
"The directors unanimously recommend that shareholders vote in favour of the proposed resolution, as they propose to do in respect of their total holdings of 45,900,000 ordinary shares representing 40.08% of the ordinary share capital of the company," it said.
Galileo Resources shares were down 0.7% at 3.60 pence Wednesday afternoon.
By Steve McGrath; [email protected]; @stevemcgrath1
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