HSTN.L Regulatory News (HSTN)

24 Jan 2008 12:25

Hansteen Holdings plc24 January 2008 For Immediate Release24 January 2008 HANSTEEN HOLDINGS PLC ("Hansteen" or "the Company") Proposed Reduction of Share Premium Account Hansteen Holdings PLC (AIM: HSTN), the investors in continental European real estate, is proposing to reduce its share premium account by the sum of £60,000,000 (the "Reduction"). 1. Posting of Circular to shareholders The Company will today dispatch a circular to its shareholders containing information relating to the Reduction and a notice of an extraordinary general meeting to be held at 11.00 a.m on 18 February 2008 at the Company's registered office at 1 Berkeley Street, London W1J 8DJ for shareholders to vote on a special resolution approving the Reduction (the "EGM"). 2. Reasons for the Reduction The Board of Directors of the Company (the "Board") has proposed the Reductionas a means of enabling the Company to pay dividends to shareholders over thecoming five years. Under English Company law, a Company may only make distributions to shareholdersout of distributable reserves. Although the Company has generated substantialprofits as at 30 June 2007, the date of the Company's first half interimresults, the Company's distributable reserves stood at only £2,355,600. This ispartly due to the mismatch of the accounting treatment of currency gains andhedging instrument losses as required under IFRS accounting rules. The Board feels that such treatment has caused the Company's balance sheet to beunrepresentative of the financial state of the Company and has adverselyaffected its ability to pay dividends to shareholders. As a result, the Boardhas taken the view that a capital re-alignment should take place through areduction of capital which will have the effect of reducing the Company's sharepremium account and increasing the amount of its distributable reserves, therebygiving the Company the ability to pay dividends to Shareholders. The Board therefore proposes that the share premium account be reduced in orderto create a reserve of distributable funds from which dividends can be paid. 3. Reduction of Share Premium Account The share premium account represents the total of all the premiums paid to theCompany for ordinary shares issued at an amount over their nominal value.Distributions may not be made out of this account under the Companies Act 1985(the "Act"). However, the Act does allow for the account to be reduced and forthe amount reduced to be included as part of the Company's distributablereserves. At today's date, the share premium account is £174,311,839. The Board proposesto reduce the share premium account by £60,000,000 and create a distributablereserve from which, subject to the protection of the Company's creditors,dividends can be paid to shareholders. Based on the Board's present view, thisamount should be sufficient to make dividend payments over the coming five yearsand leave some headroom. 4. Procedure and Timetable The Board has decided to apply to the Court to reduce the share premium accountunder a procedure governed by sections 135-139 of the Act. This procedurerequires the Company to obtain the approval of the shareholders to the Reductionby special resolution. Accordingly, an EGM will be held on 18 February 2008 atwhich the Board recommends shareholders approve the Reduction. Prior to approving the Reduction, the Court will need to be satisfied that theinterests of the Company's creditors are not prejudiced. The terms upon whichthe Court is prepared to sanction the Reduction will be subject to considerationin due course by the Court and discussion between the Company and its advisers.The Company will make the appropriate arrangements to ensure that the Court issatisfied in this regard. The Directors reserve the right to discontinue theapplication to the Court if they consider it appropriate and in the interests ofthe Company. It is anticipated that the Court will make an order confirming the Reduction onor about 19 March 2008. The Reduction will take effect upon the registration ofthe Court Order with the Registrar of Companies. For further information: David Davies Jeremy CareyKBC Peel Hunt Tavistock CommunicationsTel: 020 7418 8906 Tel: 020 7920 3150 This information is provided by RNS The company news service from the London Stock Exchange