21st Jul 2005 07:01
Mercury Group PLC21 July 2005 Mercury Group plc ("Mercury", the "Group" or the "Company") Placing, Capital Reorganisation and Capital Reduction Notice of EGM The Company announced on 4 July 2005 the placing of 666,666,666 new OrdinaryShares at 0.3p per share to raise £2.0 million. Of that total number of newOrdinary Shares placed, 116,666,666 new Ordinary Shares are conditional onShareholder approval. The Board is also today proposing the Capital Reorganisation and the CapitalReduction with a view to rebasing the price of the Ordinary Shares and improvingthe Company's future dividend capacity by eliminating the retained deficit onMercury's profit and loss reserve. The Company posted today a circular to its Shareholders relating to the Placing,Capital Reorganisation and Capital Reduction, a copy of which is available freeof charge for a period of one month from the date of this announcement from theCompany's registered office at Hilden Park House, 79 Tonbridge Road,Hildenborough, Kent TN11 9BH. The circular contains the notice of the EGM whichwill be held on Monday 15 August 2005 at 12.00 noon. at the offices of JonesDay, 21 Tudor Street, London EC4Y 0DJ. TimetableLatest time and date for receipt of Forms of Proxy 12.00 noon on 13 August 2005Extraordinary General Meeting 12.00 noon on 15 August 2005Admission and commencement of dealings in Placing Shares 08.00 a.m. 16 August 2005Record Date for the Capital Reorganisation Close of business on 16 August 2005Capital Reorganisation becomes effective 17 August 2005Despatch of new share certificates following Capital Reorganisation By 23 August 2005 Enquiries: Mercury Group plcDavid Williams, Chairman 020 7422 6555 BiddicksKatie Tzouliadis 020 7448 1000 KBC Peel Hunt LtdJulian Blunt 020 7418 8900 Details on the Placing On 4 July 2005 Mercury announced that it had raised approximately £2.0 millionfrom the placing of 666,666,666 new Ordinary Shares in order to provide theGroup with additional working capital and funding for acquisitions, should suchopportunities present themselves (the ''Aggregate Placing''). The 666,666,666new Ordinary Shares comprising the Aggregate Placing represented 34.8 per cent.of the Company's issued share capital immediately prior to the announcement ofthe Aggregate Placing and 25.8 per cent. of the Company's Enlarged Issued ShareCapital. The Placing Price represents a discount of approximately 3.2 per cent.to the closing mid-market price of 0.31p per Ordinary Share on 1 July 2005,being the last dealing day prior to the announcement made on 4 July 2005. Of the 666,666,666 new Ordinary Shares comprising the Aggregate Placing,550,000,000 new Ordinary Shares have already been allotted under authoritiesalready granted by Shareholders. The remaining 116,666,666 new Ordinary Sharesto be issued pursuant to the Placing require Shareholder approval. Applicationhas been made to the London Stock Exchange for the Placing Shares to be admittedto trading on AIM and it is anticipated that dealings in the Placing Shares willcommence on 16 August 2005. The Placing is conditional upon Admission becomingeffective. The Placing Shares will be issued credited as fully paid and willrank pari passu in all respects with the existing issued Ordinary Shares in theCompany, including the right to receive all dividends and other distributionsdeclared or paid thereon following Admission and will be subject to the CapitalReorganisation. The Directors believe that raising finance by way of a placing of new OrdinaryShares is the most appropriate method of providing funding to the Company at thepresent time. A general offer to Shareholders by way of a rights issue or otherpre-emptive issue is not considered appropriate at this stage of the Company'sdevelopment given its size, the current Shareholder structure and taking intoaccount timing and cost considerations. Background to and details of the Capital Reorganisation and associatedarrangements As part of Mercury's strategy as the holding company of an integrated propertyservices group, the Board believes that it is now appropriate to re-base theCompany's share price and is accordingly proposing the Capital Reorganisation. The Capital Reorganisation will be put into effect by the passing of aresolution at the EGM, the effect of which will be to consolidate every 25Existing Ordinary Shares into one ordinary share of 2.5p each, each of whichwill then be immediately subdivided into one Ordinary Share with a par value of1p and one A Deferred Share of 1.5p. The effect of the Capital Reorganisationwill be that any Shareholder currently holding fewer than 25 Existing OrdinaryShares will not hold any interest in the Company following the CapitalReorganisation becoming effective. The Capital Reorganisation will be carriedout after the close of business on the day after the EGM. The fractional entitlements arising on the consolidation of every 25 ExistingOrdinary Shares into one ordinary share of 2.5p will be aggregated and sold assoon as practically possible following the Capital Reorganisation. The netproceeds arising from the sale of fractional entitlements will be retained bythe Company. As at 20 July 2005, the latest practicable date prior to theannouncement of the Proposals, a shareholding of 25 Existing Ordinary Shares wasworth 10.875p. As a consequence of the Capital Reorganisation, if you hold fewer than 25Existing Ordinary Shares in the Company at the close of business on 16 August2005, you will cease to be a Shareholder in the Company. If you currently holdfewer than 25 Existing Ordinary Shares and wish to retain an interest in theCompany following the proposed Capital Reorganisation you must ensure that atthe close of business on 16 August 2005 your holding is in excess of 25 ExistingOrdinary Shares. This could be achieved by buying further Ordinary Shares on thestock market. You should not however regard this as an encouragement orrecommendation to deal in the Company's Existing Ordinary Shares and you shouldseek your own advice in this regard from your stockbroker, bank manager,solicitor, accountant, fund manager or other independent financial adviserauthorised under FSMA. A Deferred Shares and Deferred Shares The A Deferred Shares arising on the Capital Reorganisation will have no votingor dividend rights and, on a return of capital, the right only to receive theamount paid up thereon after the holders of Ordinary Shares have received theaggregate amount paid up thereon plus £1 million per Ordinary Share.Consequently, the A Deferred Shares will effectively be valueless. The Companyintends to cancel all of the A Deferred Shares pursuant to section 135 of theAct, subject to Shareholder approval and the sanction of the High Court. Pending the cancellation by the Company of the A Deferred Shares, no sharecertificates will be issued in respect of them, nor will CREST accounts ofShareholders be credited in respect of any entitlement to A Deferred Shares. Subject to Shareholder approval, the Directors intend to effect an identicalstrategy in relation to the Deferred Shares which were created on 9 April 2003and which are (as the A Deferred Shares will be) effectively valueless and inrespect of which no share certificates have been issued or CREST accountscredited. Neither the Deferred Shares nor the A Deferred Shares are (or will be) admittedto AIM. Capital Reduction As at 30 September 2004, the deficit on the Company's profit and loss accountamounted to approximately £8.4 million. The Company is now seeking to restoreits ability to pay dividends. Under section 263 of the Act the Company can onlypay dividends out of profits available for the purpose. It is proposed toeliminate the deficit on the profit and loss account and to create distributablereserves through the cancellation of the A Deferred Shares, the Deferred Sharesand the Company's share premium account. The Capital Reduction described above requires the approval of Shareholders andis also subject to the confirmation of the High Court. The Company intends toapply to the High Court for such confirmation as soon as possible. The CapitalReduction will only become effective following registration of the relevantcourt order with the Registrar of Companies in England and Wales. The Companywill give such undertakings to the High Court, including undertakings as to theuse of any special reserve arising out of the reduction of capital and as to thecreation of a blocked bank account to protect the Company's creditors as it maybe advised are appropriate. Subject to Shareholders' approval at the EGM and thesanction of the High Court, it is expected that the Capital Reduction willbecome effective by the end of October 2005. It should be noted, however, that any payment of dividends to Shareholders inthe future will be dependant on the future performance of the Company after theCapital Reduction. Extraordinary General Meeting In order to give effect to the Proposals, an Extraordinary General Meeting ofthe Company is being convened for 12.00 noon on 15 August 2005 at which theResolutions will be proposed. The Extraordinary General Meeting is to be held atthe offices of Jones Day, 21 Tudor Street, London, EC4Y 0DJ. The Resolutions areproposed for the following purposes: (i) To increase the authorised share capital of the Company. (ii) To generally and unconditionally authorise the Directors to exercise all of the powers of the Company to allot up to 2,538,643,663 Ordinary Shares of which 1,234,666,667 shares are set aside to meet the Company's maximum commitments in respect of previous acquisitions, 116,666,666 shares are the Placing Shares and 27,200,000 are to be issued to certain consultants to the Company in lieu of cash for services rendered, leaving 1,160,110,330 shares which will represent 44.53 per cent of the Company's issued share capital following the issue of the Placing Shares and the issue of the shares to consultants. The authority replaces all existing authorities to allot and will expire at the next annual general meeting. (iii) To disapply the statutory pre-emption rights contained in section 89(1) of the Act in respect of rights issues and otherwise up to a maximum nominal amount of £400,000 of which £143,866.67 will be used to issue the Placing Shares and the shares to be issued to consultants as mentioned in (ii) above, leaving £256,133.34 representing approximately 9.83 per cent of the issued share capital of the company following those share issues. This authority will expire at the next annual general meeting of the Company. (iv) To approve the Capital Reorganisation. (v) To approve the retention by the Company of the net sale proceeds resulting from the sale of any fractional entitlements arising from the consolidation. (vi) To approve the cancellation by the Company of all the Deferred Shares and A Deferred Shares. (vii) To approve the cancellation of the share premium account. Save in relation to the Placing, the issue of shares in respect of deferredconsideration on acquired businesses and the issue of Ordinary Shares to certainconsultants to the Company in lieu of cash for services rendered, the Directorshave no current intention of using the authorities referred to in paragraphs (i)and (ii) above. DEFINITIONSThe following definitions apply throughout this announcement, unless the context otherwise requires: ''Act'' or the Companies Act 1985 (as amended)''CompaniesAct''''A Deferred the new deferred shares of 1.5p each arising on the CapitalShares'' Reorganisation''Admission'' the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules''AIM'' the AIM market of London Stock Exchange''AIM Rules'' the rules for AIM companies and their nominated advisers published by the London Stock Exchange from time to time''Board'' or the directors of Mercury or any duly authorised committee''Directors'' thereof''Capital the proposed cancellation of Deferred Shares, A DeferredReduction'' Shares and share premium account as more fully explained in this announcement''Capital the proposed consolidation and sub-division of share capitalReorganisation'' as more fully explained in this announcement''Company'' or Mercury Group PLC''Mercury''''CREST'' the system for paperless settlement of trades and holdings of uncertificated shares administered and operated by CRESTCo Limited''Deferred the 7,076,147,832 deferred shares of 0.1p each in issue atShares'' the date of this announcement''Enlarged Issued the issued ordinary share capital following the Placing andShare Capital'' the Capital Reorganisation''Existing the ordinary shares of 0.1p each as at the date of thisOrdinary announcementShares''''Extraordinary the extraordinary general meeting of the Company convened forGeneral Meeting'' 15 August 2005, and any adjournment thereofor ''EGM''Form of the form of proxy for use at the Extraordinary GeneralProxy'' Meeting''Group'' the Company, its subsidiaries and its subsidiary undertakings''KBC Peel KBC Peel Hunt Ltd, the Company's nominated adviser andHunt'' broker''London Stock London Stock Exchange plcExchange''''Ordinary the ordinary shares of 0.1p each in the share capital ofShares'' Mercury or, subject to the passing of Resolution 4, ordinary shares of 1p each in Mercury''Placing'' the conditional placing of the Placing Shares''Placing 0.3p per Placing SharePrice''''Placing the 116,666,666 new Ordinary Shares (which will becomeShares'' 4,666,666 new Ordinary Shares following implementation of the Capital Reorganisation) the subject of the Placing''Proposals'' together, the Placing, Capital Reorganisation and Capital Reduction''Registrars'' Capita Registrars, of The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, the trading division of Capita IRG Plc and the registrars of the Company''Resolutions'' the resolutions to be proposed at the Extraordinary General Meeting''Shareholders'' holders of Ordinary Shares''UK'' or ''United United Kingdom of Great Britain and Northern IrelandKingdom''''UK Listing the Financial Services Authority acting in its capacity asAuthority'' the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 (as amended)''United States'' the United States of America, its territories andor ''US'' possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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