Plexus Regulatory News (POS)

Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil Equipment & Services

This announcement contains inside information

Plexus Holdings PLC ('Plexus' or 'the Company')

Declaration of Interim Dividend,

Proposed Cancellation of Share Premium Account

and Notice of General Meeting

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® friction-grip method of wellhead engineering, is pleased to announce an interim dividend and a proposed reduction of capital.

Interim Dividend

The Board considers the payment of dividends as an important means of returning value to Shareholders. Following the sale of the Company's jack-up exploration rental wellhead business and related assets to FMC Technologies Limited ("TFMC") in February 2018, the Board indicated that it would consider returning some of the cash arising from the TFMC transaction to Shareholders by way of a dividend, subject to the financial position and prospects of the Company. Accordingly, the Board is pleased to declare an interim dividend in an aggregate amount of £1,000,000 (equivalent to approximately 0.99566 pence per Ordinary Share (excluding the 4,950,495 Existing Ordinary Shares held in treasury)) (the "Interim Dividend") to all Shareholders showing on the Company's register of members as at the close of business on 22 March 2019, which is payable on 8 April 2019, subject to the requirements of the Act.

The Company's abridged and unaudited interim accounts for the 8-month period to 28 February 2019, which have been prepared only for the purposes of sections 836 and 838 of the Companies Act 2006 in order to justify payment of the Interim Dividend can be viewed at the link below and will be available on the Company's website shortly at www.plexusplc.com.

http://www.rns-pdf.londonstockexchange.com/rns/6625S_1-2019-3-12.pdf

The Company's interim results for the six months to 31 December 2018 will be notified via RNS by 29 March.

Reduction of Capital

The Board intends to undertake a court approved Reduction of Capital by way of the cancellation of its share premium account in order to increase its distributable reserves.

The Company's ability to return value to its Shareholders and pay dividends is restricted by company law and applicable accounting standards. Under the Act, companies are only permitted to make distributions to shareholders from distributable reserves. The purpose of the Reduction of Capital is therefore to increase the distributable reserves in the Company by cancelling the amount standing to the credit of the Share Premium Account.

The principal benefit of the Reduction of Capital will be to increase the Company's flexibility to pay dividends, to facilitate any prospective buyback of shares (including by way of tender offer) or to provide flexibility for any other general corporate purposes should the Company so determine at a future date, subject always to the financial position and prospects of the Company. The Reduction of Capital will not affect the voting or dividend rights of any Shareholder, or the rights of any Shareholder on a return of capital.

The Reduction of Capital is conditional upon the passing of the Resolution, as well as Court approval being obtained. Accordingly, the Company is convening the General Meeting, to be held at the offices of Fox Williams LLP at 10 Finsbury Square, London EC2A 1AF on 9 April 2019 at 11.00 a.m., at which the Company will seek Shareholder approval for the Reduction of Capital.

To convene the General Meeting, a circular containing a notice of the General Meeting and form of proxy (the "Circular") will be despatched to Shareholders of the Company. The Circular will set out further details of the Reduction of Capital, the Resolution and a recommendation from the Directors of the Company that Shareholders vote in favour of the proposals.

The Circular and Notice of General Meeting will be available on the Company's website shortly at www.plexusplc.com.

**ENDS**

For further information please visit www.posgrip.com or contact:

Proposed Cancellation of Share Premium Account

and

Notice of General Meeting

INTRODUCTION

The Company has today announced that it intends to undertake a court approved reduction of capital by way of the cancellation of its share premium account in order to generate additional distributable reserves.

Accordingly, the Company is convening the General Meeting, to be held at 11.00 am on 9 April 2019, at which it will seek Shareholder approval of the Reduction of Capital. The Resolution to be proposed at the General Meeting is set out in the Notice of General Meeting at the end of the Circular.

The purpose of the Circular is to:

· provide you with information about the background to, and the reasons for, the Reduction of Capital;

· to explain why the Board considers the Reduction of Capital to be in the best interests of the Company and its Shareholders as a whole and, accordingly, why the Directors recommend that you vote in favour of the Resolution to be proposed at the General Meeting; and

· give notice of the General Meeting for Shareholders to vote on the Resolution.

If the Resolution is passed at the General Meeting, subject to the satisfaction of the other conditions to the Reduction of Capital, the Reduction of Capital is expected to take effect on or around 8 May 2019.

REASONS FOR THE REDUCTION OF CAPITAL

Background

The Board considers the payment of dividends as an important means of returning value to Shareholders. Following the sale of the Company's jack-up exploration rental wellhead business and related assets to FMC Technologies Limited ("TFMC") in February 2018, the Board indicated that it would consider returning some of the cash arising from the TFMC transaction to Shareholders by way of a dividend, subject to the financial position and prospects of the Company. Accordingly, the Board on 12 March 2019 approved and declared an interim dividend in an aggregate amount of £1,000,000 (equivalent to approximately 0.99566 pence per Ordinary Share (excluding the 4,950,495 Existing Ordinary Shares held in treasury at the date of the Circular)) (the "Interim Dividend") to all Shareholders showing on the Company's register of members as at the close of business on 22 March 2019, which is payable on 8 April 2019, subject to the requirements of the Act.

The Company's balance sheet as at 28 February 2019 showed distributable reserves of approximately £1.5 million. The payment by the Company of the Interim Dividend will reduce such distributable reserves by the aggregate amount of the Interim Dividend.

Company law and applicable accounting standards place technical restrictions on the ability of the Company to return value to its Shareholders and pay dividends. Under the Act, companies are only permitted to make distributions to shareholders from distributable reserves. The purpose of the Reduction of Capital is therefore to increase the distributable reserves in the Company by cancelling the amount standing to the credit of the Share Premium Account.

The principal benefit of the Reduction of Capital will be to increase the Company's flexibility to pay dividends, to facilitate any prospective buyback of shares (including by way of tender offer) or to provide flexibility for any other general corporate purposes should the Company so determine at a future date, subject always to the financial position and prospects of the Company.

The proposal is conditional upon the passing of the Resolution set out in the Notice of General Meeting, as well as Court approval being obtained, further details of which are set out below. Subject to the same, the Reduction of Capital is expected to take effect upon registration of the Court's confirmation order by the UK Registrar of Companies on or around 8 May 2019.

The Reduction of Capital will not result in any change in the nominal value of the Ordinary Shares or the number of Ordinary Shares in issue. No new share certificates will be issued as a result of the Reduction of Capital.

Furthermore, the Reduction of Capital per se will not involve any distribution or repayment of share premium by the Company and will not reduce the underlying net assets of the Company.

The Reduction of Capital will not affect the voting or dividend rights of any Shareholder, or the rights of any Shareholder on a return of capital.

Further details on the Share Premium Account

In the audited report and accounts of the Company for the year ended 30 June 2018, the Company recorded on its balance sheet an amount standing to the credit of the Share Premium Account of approximately £36,893,000.

In accordance with applicable law and accounting standards, the Share Premium Account is a non-distributable capital reserve and, pursuant to relevant provisions of the Act, the Share Premium Account is treated for most purposes as part of the permanent capital of the Company. Share premium arises on the issue by the Company of shares at a premium to their nominal value. The premium element is credited to the Share Premium Account.

It is proposed that all of the Share Premium Account be cancelled. This cancellation would create realised profits that will, subject to any order of the Court, be transferred to the Company's profit and loss account and applied to the Company's accumulated profit, such sum representing distributable reserves of the Company.

Further details on the Reduction of Capital Procedure

Under the Act, a company limited by shares may reduce its share premium account, as long as it is not restricted from doing so by its articles of association, by obtaining the approval of its shareholders by special resolution and the confirmation of the Court. Similarly, pursuant to article 13 of the Company's Articles, subject to the Act and to any rights attached to any shares, the Company may by special resolution reduce its share capital or any capital redemption reserve, share premium account or other undistributable reserve in any way.

The Company is therefore seeking approval of its Shareholders to the Reduction of Capital. The Notice of General Meeting, which contains the Resolution, is set out at the end of the Circular. The Resolution is proposed in this regard to cancel the Share Premium Account to enable such reserves to be treated as distributable.

The Reduction of Capital must be confirmed by the Court, to which the Company will make an application if the Resolution is passed.

Provisional dates have been obtained for the required Court hearings of the Company's application, but they are subject to change and dependent on the Court's timetable. If the hearings go ahead on the provisional dates, the present timetable provides that the final hearing, at which it is anticipated that the Court will make an order confirming the Reduction of Capital, will take place on 7 May 2019. In any event, the actual dates of the final Court hearing to confirm the Reduction of Capital will be advertised in a national newspaper, as directed by the Court, at least seven days prior to that hearing.

The Reduction of Capital does not take effect until the Court Order is filed with and registered by the UK Registrar of Companies. The Board intends to file the required documentation with the UK Registrar of Companies on the business day following receipt of the Court Order confirming the Reduction of Capital and, subject to compliance with all procedural requirements, the UK Registrar of Companies will usually register the documents on the same day. On the present timetable, which is subject to change and dependent on the Court's timetable, this would mean that the Reduction of Capital would take effect no later than 8 May 2019. The Company will only be in a position to use the distributable reserves created by the Reduction of Capital once it becomes effective.

In order to approve the Reduction of Capital, the Court will need to be satisfied that the interests of the creditors of the Company will not be prejudiced as a result thereof. This may include, inter alia, seeking the consent of the Company's creditors to the Reduction of Capital or the provision by the Company to the Court of an undertaking to deposit all or part of the reserve arising on the Reduction of Capital into a block account (not to be treated as distributable) created for the purposes of discharging all current creditors of the Company or the non-consenting creditors of the Company.

The Board have undertaken a review of the Company's liabilities (including contingent liabilities) and consider that the Company will be able to satisfy the Court that, as at the date (if any) on which the Court Order relating to the Reduction of Capital has been registered by the UK Registrar of Companies and the Reduction of Capital therefore becomes effective, the Company's creditors will be sufficiently protected, and the Company will seek to put in place any appropriate arrangements in this regard.

The Board reserves the right (where necessary by application to the Court) to abandon, discontinue or adjourn any application to the Court for confirmation of the Reduction of Capital, and hence the Reduction of Capital itself, if the Board believes that the terms required to obtain confirmation are unsatisfactory to the Company or if as the result of a material unforeseen event the Board considers that to continue with the Reduction of Capital is inappropriate or inadvisable.

GENERAL MEETING

Set out at the end of the Circular is a notice convening the General Meeting to be held at the offices of Fox Williams LLP, 10 Finsbury Square, London EC2A 1AF, at 11.00 am on 9 April 2019 to consider the Resolution.

The Resolution (if passed) will approve and authorise the cancellation of the Share Premium Account.

The Resolution will be passed if 75 per cent. or more of the votes cast (in person or by proxy) are in favour of it.

RECOMMENDATION

The Directors believe that the Reduction of Capital will help promote the success of the Company for the benefit of its Shareholders as a whole.

The Directors unanimously recommend Shareholders to vote in favour of the Resolution to be proposed at the General Meeting as they intend to do so in respect of their own beneficial holdings* amounting, in aggregate, to 59,700,673 Ordinary Shares, representing approximately 59.44 per cent. of the Existing Ordinary Shares (excluding 4,950,495 Existing Ordinary Shares held in treasury at the date of the Circular).

* J. Jeffrey Thrall, has an indirect beneficial interest in a company which controls 32.477% of Mutual Holdings Limited. The number of Ordinary shares held by Mutual Holdings Limited in the Company at the date of this circular is 42,700,001. Additionally, J. Jeffrey Thrall has an indirect beneficial interest in Nazdar Limited, a company which holds 1,591,512 Ordinary shares in the Company and he holds 4,000 Ordinary shares through Thrall Enterprises Inc.

Ben van Bilderbeek is settlor of a trust which controls 59.962% of the shares of Mutual Holdings Limited and the entire issued share capital of OFM Investment Limited. At the date of this circular, Mutual Holdings Limited holds 42,700,001 shares and OFM Investment Limited holds 15,069,767.

Additionally, Ben van Bilderbeek holds 307,693 Ordinary shares directly, Graham Stevens holds 15,100 Ordinary Shares directly and Craig Hendrie holds 12,600 Ordinary Shares directly.

Capitalised terms in this announcement have the same meaning as in the Circular published by the Company in connection with the proposed Reduction of Capital.

NOTES:

AIM-traded oil and gas engineering services company Plexus (AIM: POS) is an IP-led company that has developed a range of products and applications based on its patent-protected POS-GRIP friction-grip technology. Having proved the superior qualities of POS-GRIP within the jack-up wellhead exploration market through the sale of this business to FMC Technologies Limited, a subsidiary of TechnipFMC (Paris:FTI, NYSE:FTI) (jointly "TFMC"), in early 2018, the Company is now focused on establishing its technology and equipment in other markets including surface production wellheads, subsea and de-commissioning.

Its suite of ongoing products and applications include: "HG"™ Wellheads, which combine POS-GRIP Technology with Gas Tight metal sealing; the Python® Subsea Wellhead (a new standard for subsea wellheads - developed in a JIP supported by Royal Dutch Shell, BG (now owned by Shell), Wintershall, Total, Maersk (now owned by Total), Tullow Oil, eni, Senergy (now Lloyds register), and Oil States Industries Inc); the POS-SET™ Connector for the growing de-commissioning and abandonment market; and Tersus-PCT, an innovative HP/HT Tie-Back connector product. Importantly, the Company also has a Collaboration Agreement with TFMC, which provides a platform to further develop and commercialise these and other applications based on its POS-GRIP technology.