14th Oct 2005 07:00
Avocet Mining PLC14 October 2005 14 October 2005 Avocet Mining Plc ("Avocet" or "The Company") Extraordinary General Meeting A notice of Extraordinary General Meeting ("EGM") for Avocet has been sent toshareholders. The EGM is to be held at 7th Floor, 9 Berkeley Street, London W1J8DW on 11 November 2005 at 11am. The purpose of the EGM is to renew shareholder approval for a reduction of sharecapital and cancellation of share premium account of the Company (the "Capital Reduction"). The Capital Reduction Shareholders will recall that at the 2004 Annual General Meeting of the Companythey gave their approval to a Capital Reduction. A Capital Reduction does notbecome effective until confirmed by the High Court and the Order registered withthe Registrar of Companies. Given the length of time that has passed since the2004 Annual General Meeting, the board considers it prudent to renew shareholderapproval for the Capital Reduction prior to applying to the Court. As a result of historical losses the Company as at 31 March 2005 had anaccumulated deficit on its profit and loss account of US$47,671,000. Byundertaking the Capital Reduction this deficit can be eliminated. A detailedexplanation of the Capital Reduction procedure is set out in the notes thataccompanied the 2004 notice of Annual General Meeting which is embodied in theCompany's Annual Report and Accounts 2004. Subject to the protection ofcreditors (as to which see below) the balance of the reserve arising on theCapital Reduction after eliminating the accumulated deficit on the Company'sprofit and loss account will be treated as a distributable reserve. In summary, it is proposed that the share capital of the Company be reduced bycancelling paid up capital to the extent of 20 pence on each ordinary share of25 pence, whether issued or unissued, and reducing the nominal value of eachordinary share, whether issued or unissued, to 5 pence. In addition, the sharepremium account will be cancelled. Shareholders should note that the proposed reduction of capital and cancellationof share premium account will not result in any return of capital toshareholders. It will instead have the effect of eliminating the accumulateddeficit on the Company's profit and loss account, which will enable the Company,subject to the availability of profits, to pay dividends in the future.Similarly, such profits could be applied to purchase shares of the Company to beheld in treasury or cancelled and would be available for other corporatepurposes of the Company. The Company intends to seek court confirmation of the Capital Reduction as soonas practicable after the EGM and the reduction is expected to become effectivein mid-December 2005. Shareholders should note that the reduction of capital andcancellation of share premium account are proposed to take effect in relation tothe share capital and share premium as at 5pm on the business day prior to thefinal effective Court hearing of the Company's application for the court'sconfirmation of the Capital Reduction. The Capital Reduction will therefore takeeffect in relation to any Shares in issue prior to that time (whether pursuantto the exercise of any share options or otherwise) and whether those shares werein issue as at the date of the EGM or not. The Court will be concerned to protect the interests of creditors of the Companyas at the effective date of the Capital Reduction. It is anticipated that thebalance of the reserve arising after the elimination of the deficit on theCompany's profit and loss account will not be available immediately to betreated as a distributable reserve. However such reserves may arise, over time,for example if the Company issues new shares. It is anticipated that the balanceof the reserve will become distributable once the creditors of the Company as atthe effective date of the Capital Reduction have been discharged or consented tothe proposed Capital Reduction or some other form of protection acceptable tothe Court has been put in place. The precise form of creditor protection is forthe Court to determine and the Company will take such steps as it is advised areappropriate to satisfy the Court in this regard. It is not proposed that existing share certificates be replaced. Recommendation The Directors unanimously recommend shareholders to vote in favour of theresolution to be proposed at the EGM, as they intend to do in respect of theirshareholdings of 7,598,127 ordinary shares in aggregate representingapproximately 7.26 per cent of the existing issued ordinary share capital of theCompany. Nigel McNair ScottChairmanAvocet Mining PLC AVOCET MINING PLC (Registered in England, with company number 3036214) Notice of Extraordinary General Meeting Notice is given that an extraordinary general meeting of the members of theCompany will be held at 7th Floor, 9 Berkeley Street, London W1J 8DW on 11November 2005 at 11am to consider, and if thought fit, pass the followingspecial resolutions: Special Resolutions 1. That the amount standing to the credit of the share premium accountof the Company as at 5pm on the business day prior to the final effectivehearing of the Petition to be presented to the Court for the Court'sconfirmation of this and the next special resolution (the "Record Date")be cancelled.2. That the share capital of the Company as at the Record Date bereduced by cancelling and extinguishing paid up capital to the extent of 20p oneach of the issued ordinary shares of 25p each in the capital of the Company andby reducing the nominal value of each and every ordinary share as at the RecordDate, whether issued or unissued, from 25p to 5p. By order of the BoardA P McFarlaneSecretary This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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