2nd Feb 2007 07:00
Glen Group PLC02 February 2007 Glen Group PLC2 February 2007 Glen Group plc Proposed Capital Reorganisation and Placing of new Ordinary Shares As outlined in the AIM Admission document issued early last year when Glen Groupplc ("Glen" or "the Company") undertook the reverse takeover of EclecticHoldings Limited, it is the stated strategy of the Board to grow the Companyboth organically and by acquisition. The Board has been reviewing potentialopportunities for acquisitions but has been unable to proceed with any thatrequire the issue of shares, because the market price of the Company's shareshas fallen below their nominal value. Under the terms of the Companies Act 1985,the Company is prohibited from issuing shares at a discount to the nominal valueand, accordingly, the Board has been unable to pursue any acquisitionopportunities of this nature. The Company has also been unable to raise furtherequity for expansion, by the issue of new shares for cash, while the marketprice remains below the nominal value. In the circumstances, the Board has determined that it is in the best interestsof the shareholders as a whole to remove this barrier to acquisition-led growthby the reorganisation of the share capital structure. This will allow the Boardto proceed with their stated acquisition strategy. The Board has also determinedthat it is appropriate to raise a modest amount of further equity capital whichwould allow the Company to fund minor acquisitions or the costs ofacquisition-related due diligence, as well as provide additional workingcapital. Accordingly, the Company's brokers, Ellis Stockbrokers Limited, haveplaced 100,000,000 shares at a price of 0.50p per share to raise £500,000 beforeissue costs ("the Placing") conditional on the Company's share capital beingreorganised as outlined below ("the Capital Reorganisation"). Capital Reorganisation The Capital Reorganisation is being proposed because the current market value ofthe Company's ordinary shares is below their nominal value of 1.00p per share.Under the Companies Act 1985, it is unlawful to issue shares at a price belowtheir nominal value and, as a result, the Company has been unable to issueshares below 1.00p per share. It is proposed therefore to sub-divide and reclassify each of the Company'sissued ordinary shares of 1.00p into one ordinary share of 0.10p and onedeferred share of 0.90p ("a Deferred Share") and to sub-divide each of theCompany's authorised but unissued ordinary shares of 1.00p into ten ordinaryshares of 0.10p each. The Deferred Shares will have no voting rights and will have negligible rightsas to dividends and on a return of capital. They will not be listed on any stockexchange and will not be freely transferable. One of the provisions attaching tothe Deferred Shares will allow the directors to effect the transfer of all ofthe Deferred Shares to a custodian for no consideration. In due course, thedirectors may arrange for the Company to cancel all the Deferred Shares oreffect a re-purchase of the Deferred Shares (for a consideration of 1.00p forall of the Deferred Shares in issue) subject, in each case, to due compliancewith relevant legislation. No new share certificates will be issued in respect of the ordinary shares of 0.10p and existing share certificates will remain valid. The ordinary shares of 0.10p each will trade on AIM and, without taking account of the shares to be issued under the Placing, will be identical in number to the existing ordinary shares of 1.00p each in issue as at the date of this circular, which are asfollows: Class Nominal Value per share Number in issue Voting rights attached Ordinary 1.00p 401,508,895 401,508,895 No share certificates will be issued in respect of the Deferred Shares. Admission to AIM The Company will apply for the 100,000,000 new ordinary shares to be issuedpursuant to the Placing to be admitted to trading on AIM and dealings areexpected to commence on 27 February 2007. Admission of the 100,000,000 newordinary shares to trading on AIM is conditional on shareholder approval of theCapital Reorganisation. Strategy As well as continuing to pursue organic growth, the Directors intend to identifypotential acquisition targets and investments for the Company from a combinationof their own research, market knowledge and network of contacts. The Directors'strategy is for the Company to acquire or invest in businesses with one or moreof the following characteristics: • IT and communications services businesses with sustainable growth prospects; • a strong position in an established market or an early mover position in a potentially fast growing market; • under exploited assets; or • an established management team, requiring working capital and/or strategic advice to achieve its potential. In their investment and acquisition considerations, the Directors will focusprimarily on businesses based in the United Kingdom or Ireland operating in theIT and communications space. Although the Directors believe there are significant numbers of investmentprospects which potentially fall within these categories, changing marketconditions and valuation issues may require the Company to broaden or alter itsinvestment criteria. Timetable Set out below is a timetable outlining the principal events relating to theCapital Reorganisation: Latest time and date for receipt of forms of proxy 2.30pm on 24 February 2007 Extraordinary General Meeting 2.30pm on 26 February 2007 Record Date (being the latest date on which dealingsin the existing ordinary shares of 1.00p will be registered) 2.30pm on 24 February 2007 Dealings in new ordinary shares of 0.10p commence and up to 100,000,000 new ordinary shares admittedto trading on 27 February 2007 ENQUIRIES: Glen Group plcGraham J DuncanChief Executive 0845 119 2100 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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