Last checked at 11 Aug 2009 16:31
Zest Group plc (the "Company")
Proposed Sub-division of Share Capital
11 August 2009
The Board of Zest Group plc ("Zest") announce that a General Meeting of the Company will take place at the offices of Greenhair Services Ltd at Level 5, 22 Arlington Street, SW1A 1RD on Thursday 3 September 2009 at 10.00am ("Meeting"). The purpose of the Meeting is to approve a sub-division of the Company's shares to reduce the par value of ordinary share capital, to reclassify the Company's authorised share capital, to amend the Company's articles of association and to provide the Board with the necessary authorities to allow them to issue additional ordinary share capital to raise additional working capital for the Company.
Sub-Division of Share Capital and Amendment of Articles of Association
The Directors propose that each existing ordinary share of 0.25 pence be sub-divided into one new ordinary share of 0.01 pence and one deferred share of 0.24 pence, and to amend the Company's Articles of Association to set out the rights attaching to the deferred shares.
The Directors believe that this action is necessary because the existing ordinary shares of the company are currently trading at a market price which is below their nominal value of 0.25 pence each, a situation exacerbated by the current macro-economic environment which has led to a general sharp decline in equity values on the stock market over the last twelve months. The Company may only lawfully issue new shares for a subscription price at or above the nominal value of these shares and so the current situation provides an effective block on the Company's ability to raise new equity funding. The Board considers that the Sub-Division would make the ordinary shares of the Company a more attractive investment proposition to potential investors and would facilitate any future fund raising that may be appropriate to the development of the Company's ongoing business. Accordingly, the board believes that is prudent to sub-divide the share capital of the Company in order to facilitate future fundraisings.
The number of new ordinary shares in issue following the sub-division will equal the number of existing ordinary shares currently in issue. The sub-division will not affect the rights attaching to the existing ordinary shares, other than to alter their nominal value and, in particular , will not affect the voting rights of the holders of existing ordinary shares. The sub-division will be made by reference to holdings of existing ordinary shares on the register as at the close of business on the 3 September 2009 ("Record Date") Application has been made for the existing ordinary shares of 0.25p to be cancelled and the new ordinary shares of 0.1p to be admitted to trading on AIM on 4 September 2009, assuming the resolutions proposed at the GM are passed.
As all existing ordinary shares are being subdivided, each shareholder's percentage holding in the issued share capital of the Company immediately before and after the implementation of the sub-division will remain unchanged.
New share certificates will not be issued and the existing certificates will continue to be valid following the sub division. Shareholders who hold their shares through CREST should note the company's ISIN number will not change and will continue to be valid.
In addition, the Directors propose that the authorised share capital of the Company be reclassified (and, if necessary, increased) such that, following the passing and implementation of resolution 1, the authorised share capital of the Company shall be £10,000,000 comprising 4,000,000,000 New Ordinary Shares and 4,000,000,000 Deferred Shares, having the rights and privileges and being subject to the restrictions contained in the Articles of Association of the Company (as amended from time to time).
Authority to issue new ordinary shares
At the Meeting, the Board will also seek approval to issue authorised but unissued new ordinary shares under S.80 Companies Act 1985 and a specific authority to issue up to £100,000 in nominal value of new ordinary shares outside of pre-emption rights under S.95 Companies Act 1985.
Notice of General Meeting
A Notice of General Meeting together with an explanatory letter and proxy form are being posted to shareholders today. Copies of these documents are available free of charge on the Company's website: www.zestmusic.com.
Enquiries:
Zest Group Plc
Steve Weltman, Chief Executive
+44 (0) 208 398 4144
W.H. Ireland
Katy Birkin/Nicola Rayner
+44 (0) 121 265 6330