Alumasc Group Regulatory News (ALU)

4 May 2007 07:00

Alumasc Group PLC04 May 2007 The Alumasc Group plc 4 May 2007 THE ALUMASC GROUP PLC (the "Company") Proposal for the cancellation of the Company's share premium account and capital redemption reserve 1 Introduction The board of the Company is proposing to seek shareholder approval at anextraordinary general meeting, of the Company to be held at 10.00 a.m. on 30 May2007 at the offices of Wragge & Co LLP at 3, Waterhouse Square, 142 Holborn,London, EC1N 2SW for the cancellation of the Company's share premium account andcapital redemption reserve. This will involve applying to the High Court for thereduction of the share premium account and capital redemption reserve. The boardbelieves that the increase in the Company's distributable reserves, achieved bythe proposed cancellations, will assist with the maintenance of the Company'scurrent dividend policy and, consequently, the marketability of the Company'sshares as well as allowing a more efficient utilisation of the Company's reserveaccounts. 2 Reasons, effect and benefits of the board's proposal The Company currently has a balance on its share premium account of £28,538,881which has arisen as a result of various prior issues by the Company of itsshares at prices in excess of their nominal value. The Company currently alsohas a balance on its capital redemption reserve of £693,352 which has arisen asa result of prior purchases by the Company of its own shares out ofdistributable profits. Under the Companies Act 1985, a company's share premiumaccount and capital redemption reserve constitute non-distributable reserves ofa company and the sums credited to those reserves are not distributable toshareholders. The Company's articles of association and the Companies Act 1985 permit theCompany to cancel its share premium account and capital redemption reserve inappropriate circumstances provided the Company resolves by special resolution todo so and if subsequent confirmation of those cancellations is given by the HighCourt of Justice. The reserve which arises as a result of the cancellation of those reserves canthen be transferred to the Company's distributable reserve account asrepresenting realised profit except to the extent that, and for so long as, theCompany has undertaken that it will not treat the reserve arising as a realisedprofit, or where the court has directed that it shall not be treated as arealised profit. Subject to any direction given by the court in confirming the proposedcancellations and subject to the terms of any undertaking given by the Companyin relation to the reserve which arises, the effect of the proposal, if approvedby shareholders, will enable the Company to increase its distributable reservesby the aggregate of the relevant balances on the Company's share premium accountand capital redemption reserve in existence at the time the proposedcancellations take effect. The current aggregate balance of these reserves is approximately £29.2 million.The board does not anticipate that there will be any material change to theaggregate balance of those reserves prior to the proposed cancellations takingeffect. 3 Extraordinary general meeting As explained above, the proposal is conditional on the approval of the Company'sshareholders. Accordingly, the Company is today issuing a circular toshareholders in relation to the proposal which includes a notice to convene anextraordinary general meeting of the Company to be held at 10.00 a.m. on 30 May2007 at the offices of Wragge & Co LLP at 3, Waterhouse Square, 142 Holborn,London, EC1N 2SW, at which a resolution will be proposed as a special resolutionto: • cancel the share premium account of the Company; and • cancel the capital redemption reserve of the Company. Full details of the proposal are contained in the circular. The circular hasalso been submitted to the UK Listing Authority and will shortly be availablefor inspection at the UK Listing Authority's Document Viewing Facility which issituated at: Financial Services Authority, 25 The North Colonnade, Canary Wharf,London E14 5HS: telephone 020 7066 1000. In addition, the circular will beposted to the Company's website at www.alumasc.co.uk. The current timetable in relation to the holding of the extraordinary generalmeeting is summarised below. 10.00 a.m. on 28 May 2007 - Latest time and date for receipt of Forms of Proxyfor shareholders 10.00 a.m. on 30 May 2007 - Extraordinary general meeting References to time in the above timetable is to London time. 4 Confirmation by the court If the proposal is approved by shareholders at the extraordinary generalmeeting, the Company will then seek confirmation of the proposed cancellationsby the High Court of Justice. Prior to confirming the proposed cancellations thecourt will need to be satisfied that the interests of the Company's creditorswill not be prejudiced by the proposed cancellations. The Company intends to offer to the court an undertaking that it will treat thereserve, which arises as a result of the proposed cancellations, asnon-distributable until certain conditions have been met. The board believes, onlegal advice, that this undertaking will be acceptable to the court. The boardalso believes that the Company will be able to satisfy the relevant conditionsset out in the undertaking within a reasonable period of time after the proposedcancellations become effective. No guarantee can be given that the court will confirm the proposed cancellationsor that the Company will be able subsequently to satisfy the conditions attachedto any undertaking which would permit the reserve arising to be treated asrealised profit and to be transferred to the distributable reserve account ofthe Company. The proposed cancellations will not become effective until such time as theorder of the court confirming the cancellations is registered by the Registrarof Companies. It is currently anticipated that the court will hear the Company'sapplication on 20 June 2007 and that the proposed cancellations, if confirmed bythe court at that hearing, will become effective shortly thereafter. Enquiries: The Alumasc Group plc 01536 383844 John McCall (Chairman) Paul Hooper (Chief Executive) Andrew Magson (Finance Director) Bankside Consultants Limited Charles Ponsonby 020 7367 8851 This information is provided by RNS The company news service from the London Stock Exchange