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28 Jul 2009 09:30
28 July 2009
Merchant House Group PLC (the 'Company')
Proposed share capital re-organisation
The Company announces that it has posted to shareholders today a circular (the "Circular") regarding, inter alia, the proposed sub-division of the Company's ordinary share capital the effect of which will be to sub-divide each ordinary share of 0.5p each ("Ordinary Shares") into 1 new Ordinary Share of 0.01p each ("New Ordinary Shares") and 1 deferred share ("Deferred Shares") of 0.49p each (the "Share Capital Re-organisation").
Rationale for the Share Capital Re-organisation
For some time, the market price of the Company's Ordinary Shares has meant that the Company has become unable to issue any shares at, or at a discount to, the prevailing market price as this would be below the nominal value of an Ordinary Share. Under the terms of the Companies Act 1985, the Company is prohibited from issuing shares at a discount to the nominal value. Accordingly, the Company is proposing to carry out the Share Capital Re-organisation, the effect of which will be to sub-divide each Ordinary Share of 0.5p each into 1 New Ordinary Share of 0.01p each and 1 Deferred Share of 0.49p each.
Resolution 1 contained in a Notice of General Meeting set out in the Circular describes the proposed steps in the Share Capital Re-organisation. It is proposed that each of the Ordinary Shares of 0.5p be sub-divided and re-designated into one New Ordinary Share of 0.01p and one Deferred Share of 0.49p. The Deferred Shares will have no voting rights and will have no rights as to dividends and negligible rights on a return of capital. They will not be listed on any stock exchange and will not be freely transferable. One of the provisions attaching to the Deferred Shares will allow the directors of the Company to effect the transfer of all of the Deferred Shares to a custodian for no consideration. In due course, the Directors may arrange for the Company to cancel all of the Deferred Shares or effect a re-purchase of the Deferred Shares (for a consideration of 1.00p for all of the Deferred Shares in issue) subject, in each case, to due compliance with relevant legislation.
No new share certificates will be issued in respect of the New Ordinary Shares of 0.01p and existing share certificates will remain valid. The Company's ISIN (GB0000 577386) and SEDOL (0057738) will remain unchanged. The New Ordinary Shares of 0.01p each will trade on AIM and will be identical in number to the existing Ordinary Shares of 0.5p each in issue as at the date of the Circular. No share certificates will be issued in respect of the Deferred Shares. By effecting the Share Capital Re-organisation in this way, the value of the Company's authorised share capital remains the same.
Other proposals
Resolution 2 set out in the Notice of General Meeting contains a proposed authority to authorise the Directors to allot relevant securities up to a maximum nominal amount of £200,000 pursuant to section 80 of the Companies Act 1985.
Resolution 3 set out in the Notice of General Meeting contains a proposed authority to authorise the Directors to allot relevant securities pursuant to the authority proposed to be granted to the Directors under Resolution 2 in the Notice of General Meeting as if section 89(1) of the Companies Act 1985 did not apply to any such allotment provided that such power shall be limited to the allotment of equity securities up to an aggregate nominal amount of £10,000. This authority, if passed, would enable the Directors to allot up to 100,000,000 new Ordinary Shares for cash (equivalent to 93 per cent. of the current issued share capital of the Company) without being required to comply with the statutory requirement to offer those shares to shareholders in proportion to their existing shareholdings. New shares issued pursuant to this authority may be placed with investors at any price (save that the price may not be lower the par value per Ordinary Share) and may by issued at a price which represents a discount to the then prevailing share price.
General Meeting
A notice convening a General Meeting of the Company on Friday 21st August 2009 at 11.15 a.m. to be held at the Company's offices, 7th Floor, Aldermary House, 10-15 Queen Street, London EC4N 1TX is set out in the Circular. The General Meeting has been convened to consider, and if thought fit, to pass resolutions to approve the Share Capital Re-organisation.
Recommendation
The Directors consider that the proposals being put to the Shareholders as described in the Circular are fair and reasonable insofar as Shareholders are concerned. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.
Enquiries:
Merchant House Group Plc
James Holmes
Tel: 020 7332 2200
Shore Capital and Corporate LimitedPascal Keane
Tel: 020 7408 4090
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