Advanced Medical Solutions Group Regulatory News (AMS)

27 Apr 2007 07:01

Advanced Medical Solutions Grp PLC27 April 2007 For Immediate Release 27 April 2007 Advanced Medical Solutions Group plc ("AMS" or "the Company") Capital Reorganisation Proposal for the reduction of the Company's share capital by the cancellation ofits Deferred Shares of 5p each and the cancellation of its share premium account Advanced Medical Solutions Group plc (AIM: AMS), the global medical technologycompany, today announces details of a proposal for a capital reorganisation togive the Company a capital structure that would allow the Company to paydividends to shareholders at some point in the future should the Board make arecommendation to do so. The Board of the Company has therefore resolved to seek shareholder approval toreduce the Company's share capital by the cancellation of its 93,553,394Deferred Shares of 5p each (the "Deferred Shares") and cancel its share premiumaccount at the forthcoming annual general meeting of the Company to be held on 6June 2007. The Deferred Shares The Deferred Shares arose from a capital reorganisation of the Company whichtook effect in 2002 and carry no voting rights, do not rank for dividends andwill only participate on a winding up of the Company after the sum of £1,000,000has been paid in respect of each Ordinary Share. The Deferred Shares are notlisted or quoted on any stock exchange and no share certificates have beenissued in respect of the Deferred Shares. The value of the Deferred Shares is therefore negligible and the Company'sarticles of association permit the Company to reduce its share capital bycancelling the Deferred Shares for no consideration. The share premium account The Company currently has a balance on its share premium account of £37,977,445which has arisen as a result of various prior issues by the Company of itsshares at prices in excess of their nominal value. Under the Companies Act 1985,the Company's share premium account constitutes a non-distributable reserve ofthe Company and the sums credited to that reserve are not distributable toshareholders. The cancellation of the deferred shares and the share premium account The Company, as a public company, may not distribute dividends to itsshareholders save out of the balance of its accumulated realised profits lessits accumulated realised losses ("distributable profits") and provided theamount of the distribution does not exceed the value of its net assets less theaggregate value of its called-up share capital and non-distributable reserves. As at 31 December 2006, the Company had an accumulated net realised loss balanceof £36,748,704 as recognised by the deficit on its profit and loss accountreserve in its financial statements for the period ended 31 December 2006. Accordingly, the Company is currently unable to distribute dividends to itsshareholders and it will continue to be unable to distribute dividends until thedeficit on its profit and loss account reserve has been eliminated and it hasaccumulated sufficient distributable profits to finance any dividenddistribution. If approved by shareholders, and confirmed by the court, the proposed reductionand cancellation, taken together, will: • eliminate the deficit of £36,748,704 recorded in the Company's profit and loss account reserve as at 31 December 2006; and • create a distributable profit reserve of approximately £5,900,000 subject to any direction given by the court in confirming the proposed reduction and cancellation, and subject to the Company satisfying the terms of any undertaking given by the Company to the court in connection with the proposed reduction and cancellation. In the opinion of the board, the elimination of the deficit on the Company'sprofit and loss account reserve, and the subsequent creation of distributablereserves which the board anticipates will be achieved by the proposed reductionand cancellation in due course, will be of benefit to the Company and will be inthe best interests of its shareholders as a whole. Confirmation by the court If the proposal is approved by shareholders at the annual general meeting, theCompany will then seek confirmation of the proposed reduction and cancellationby the High Court of Justice, subject to an undertaking that it will treat theprofit reserve, which will arise as a result of the proposed reduction andcancellation, as non-distributable until certain conditions have been met. Theseare that prior to confirming the proposed reduction and cancellation the courtwill need to be satisfied that the interests of the Company's creditors will notbe prejudiced by the proposed reduction and cancellation. No guarantee can be given that the court will confirm the proposed reduction andcancellation or that the Company will be able subsequently to satisfy theconditions attached to any undertaking which would permit the profit reservearising to be treated as realised profit and to be transferred to thedistributable reserve account of the Company. Annual general meeting The Company's annual report and accounts for the year ended 31 December 2006will contain a notice to convene the annual general meeting of the Company to beheld on 6 June 2007. The annual general meeting will consider both ordinarybusiness as well as the special business of considering and, if thought fit,passing a special resolution to i) reduce the share capital of the Company bycancelling and extinguishing all of the issued Deferred Shares and ii) cancelthe share premium account of the Company. Further details of the proposal are contained in the Report of the Directors andin the Explanatory Statement which is included with the Company's annual reportand accounts for the year ended 31 December 2006. -ENDS- For more information please contact: Advanced Medical Solutions Group plc +44 (0) 01606 545508 Don Evans (Chief Executive Officer) Mary Tavener (Group Finance Director) www.admedsol.com Buchanan Communications +44 (0) 020 7466 5000 Mark Court/Mary-Jane Johnson Notes for Editors: Advanced Medical Solutions is a UK based company developing and providingleading edge technology to the $15 billion global woundcare market. Founded in 1991 and quoted on AIM, the Company is focused on the design,development, manufacture and sale of advanced woundcare dressings and productsfor closing wounds and sealing tissue. AMS provides a full range of advanced woundcare products for sale in hospital,nursing home and community care markets. The main indications are for chronicwounds such as ulcers and pressure sores. These products pioneer the concept ofmoist wound healing to allow wounds to heal faster and with less pain andscarring if they remain moist. They protect the wound, deal with tissue fluidsand provide an optimal environment for healing to occur. AMS' resources ensure aunique position as a vertically integrated 'one stop shop' to provide allcategories of moist wound healing products. The Company has the capability tomove a product from design and development through to production and deliveryready for distribution into customer markets. The acquisition of MedLogic in 2002 has brought AMS products based uponcyanoacrylate adhesive technology which allow the closure of wounds followingtrauma or surgical incisions, or seal skin to protect against breakdown or woundinfection. These products address the emerging tissue adhesives and sealantssegment of the wound closure market. AMS' technology and products currently serve the majority of the key globalmarkets and strategic partners. This information is provided by RNS The company news service from the London Stock Exchange