AGM: Resolution 12 ... preparation for dividends24 Jun 2021 12:20
AGM: Resolution 12 ... preparation for dividends
Resolution 12: Capital Reduction
The Company does not have sufficient distributable reserves to enable the Board to recommend the payment of dividends should it be considered desirable to do so in the future. The Board therefore proposes that the Capital Reduction be effected in order to remove the deficit on the Company's profit and loss account. According to the financial statements of the Company for the year ended 31 December 2020, the Company had accumulated losses of €21,861,173.82.
The Capital Reduction is proposed to be effected by cancelling part of the balance standing to the credit of the Share Premium Account. Cancelling € 21,861,173.82 of the amount standing to the credit of the Share Premium Account will, subject to the discharge of any undertakings required by the Court as explained below, be sufficient to eliminate the deficit on the profit and loss account as at 31 December 2020. As a result, any positive distributable reserves generated by the Company after 31 December 2020 would be available for the Board to use for the purposes of paying dividends (should circumstances in the future make it desirable to do so).
It is therefore proposed that € 21,861,173.82 of the amount standing to the credit of the Company's Share Premium Account is cancelled.
In addition to the approval by Shareholders, the Capital Reduction requires the approval of the Court. Accordingly, following the AGM, an application will be made to the Court in order to confirm and approve the Capital Reduction. In providing its approval of the Capital Reduction, the Court is likely to require protection for the creditors (including contingent creditors) of the Company whose debts remain outstanding on the relevant date, except in the case of creditors which have consented to the Capital Reduction.
It is anticipated that the initial directions hearing in relation to the Capital Reduction will take place three weeks after the filing of the relevant court application to the District Court of Nicosia, with the final Court hearing taking place on either on the date of the initial hearing or at a later date, subject to the Court’s discretion and availability, and the Capital Reduction becoming effective on the date of registration of the Court Order at the Registrar of Companies in Cyprus. The Board reserves the right to abandon or to discontinue (in whole or in part) the application to the Court in the event that the Board considers that the terms on which the Capital Reduction would be (or would be likely to be) confirmed by the Court would not be in the best interests of the Company and/or its Shareholders as a whole. The Board has undertaken a thorough and extensive review of the Company's liabilities (including contingent liabilities) and considers that the Company will be able to satisfy the Court that, as at the date (if any) on which the Court order relating to the Capital Reduction and the statement of capi
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