17th Oct 2005 12:30
Cookson Group PLC17 October 2005 17 October 2005 Cookson announces intention to terminate SEC Registration and effect Capital Reduction On 19 September 2005, Cookson Group plc ("Cookson" or the "Company") announcedthat it was examining the steps required to terminate registration of itsordinary shares ("De-registration") with the US Securities and ExchangeCommission ("SEC"). De-registration requires that the number of US residentholders of the Company's shares, whether they hold shares directly or through anominee, be below 300. The Company confirms that it intends to seek shareholderapproval to amend its Articles of Association to allow the Directors to requireits US resident shareholders to sell their shares into the market. If theseamendments are approved, the Board intends to exercise this power if necessaryto reduce the number of US resident shareholders to below 300. If approved, the Board would further be able to exercise this power from time totime after De-registration in order to maintain the number of US residentshareholders below 300 at each financial year end of the Company, which would berequired under current SEC rules for the Company to remain exempt from SECre-registration. To the same end, the Company might amend the terms of certainof its employee share schemes to provide for cash settlement of any options toreceive its shares held by US residents, if this cash settlement becomesnecessary to maintain the number of the Company's US resident optionholdersbelow 300. The Company will also consider whether to settle share awardsgranted to US resident employees under certain share schemes with cash. In line with a number of other UK companies, Cookson is seeking to effectDe-registration due to the increasing cost, both in cash terms and in respect ofmanagement time consumed, of maintaining its registration in the US andcomplying with SEC reporting and other applicable US obligations. Havingconsidered the costs and benefits of maintaining SEC registration, Cookson'sBoard believes that the burden and expense of complying with SEC reporting andother applicable US obligations is out of proportion to the benefits obtained bythe Company and its shareholders as a whole, given the relatively small size ofthe US shareholder base. The Company estimates its current external UScompliance costs, together with significantly higher future incremental costswhich would no longer be required following De-registration, would be in excessof £1 million per annum. De-registration would also significantly reduce theamount of management time that would otherwise be absorbed by that complianceprocess. Cookson ordinary shares will continue to be listed on the Official List of theUK Listing Authority ("UKLA") and to be traded on the London Stock Exchange'smarket for listed securities. The Company will also continue to be subject tothe listing rules, the prospectus rules and the disclosure rules made by theUKLA, and to the Combined Code on Corporate Governance in the UK. The Companywill therefore continue to be bound by a rigorous system of corporategovernance. A proposal to amend Cookson's Articles of Association to facilitateDe-registration and suspension of its SEC reporting and other related USobligations will be considered at an Extraordinary General Meeting of Cookson'sshareholders expected to be held in mid-December 2005 (the "EGM"). Assumingshareholders approve the proposed amendments to the Company's Articles ofAssociation, the Board intends to start the procedures required to effect anynecessary transfer of shares held by US residents soon thereafter. The Company also intends to effect a reduction of its share capital by: (a) cancelling all of the deferred shares of 49 pence each, as the Company had undertaken to do at the time of its rights issue in 2002 (at which time such shares were created), in order to create a more efficient capital structure; and (b) cancelling the share premium account of the Company to create additional reserves for the Group going forwards. The approval of shareholders to the capital reduction will also be sought at theEGM. The proposed capital reduction must also be confirmed by the Court beforeit can become effective. Cookson will be posting a circular to its shareholders in mid-Novemberexplaining the proposed amendments to its Articles of Association and the othermatters outlined above and convening the EGM. In connection with the De-registration, on 19 September 2005 the Companyannounced that it had elected to terminate its American depositary receipt("ADR") programme effective as at close of trading on 19 October 2005. ADRholders were notified of this by Citibank, N.A., the depositary for the ADRprogramme. Cookson expects its ADRs to cease being quoted on theOver-the-Counter Bulletin Board around the same time as a result of thistermination. The Company expects to issue its usual Third Quarter trading update on 4November 2005. Enquiries: Richard Malthouse, Group Secretary Tel: +44 (0)20 7061 6500 About Cookson Group plc Cookson Group plc is a leading materials science company which providesmaterials, processes and services to customers worldwide. The Group's operationsare formed into three divisions - Ceramics, Electronics and Precious Metals. TheCeramics division is the world leader in the supply of advanced flow control andrefractory products and systems to the iron and steel industry and is also aleading supplier of refractory lining materials for iron and steelmaking andother industrial processes. The Electronics division is a leading manufacturerand supplier of materials and services to the electronics industry, primarilyserving fabricators and assemblers of printed circuit boards, assemblers ofsemiconductor packaging and the electrical and industrial markets. The PreciousMetals division is a leading supplier to the jewellery industry of fabricatedprecious metals products. Headquartered in London, Cookson employs some 16,000 people in more than 35countries and sells its products in over 100 countries. Cookson Group plc265 StrandLondon WC2R 1DB Tel: + 44 (0)20 7061 6500Fax: +44 (0)20 7061 6600www.cooksongroup.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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