Capital Reorganisation

15 Dec 2005 14:30

Berkeley Berry Birch PLC15 December 2005 Proposed Capital Reorganisation, amendment of Articles of Association and Notice of Extraordinary General Meeting Berkeley Berry Birch plc ("BBB" or the "Company") is today sending a circular toshareholders of the Company setting out full details of its proposed capitalreorganisation. The Company announced on 1 December 2005 that it was requesting a suspension oftrading in its ordinary shares. In that announcement BBB stated that progresswas being made in addressing the Company's regulatory capital shortfall andfuture working capital requirements. The Company is working on proposals torectify the regulatory capital shortfalls by means of planned disposals and anequity fundraising. These plans are being advanced but, to date, the FinancialServices Authority has not satisfied itself of the adequacy of these proposals. In order to facilitate any fundraising, the Company is undertaking areorganisation of its existing share capital. This capital reorganisation isnecessitated by the Companies Act 1985 (the "Act"), which prevents companiesfrom issuing shares at a discount to their par value. The par value of anordinary share is currently 10 pence, as compared with a market price of 5 penceper share at the close of business on 30 November 2005 (the latest practicabledate prior to the suspension of trading in the ordinary shares of the Company).Consequently, it is proposed to sub-divide each of the existing ordinary sharesof 10 pence into 1 ordinary share of 1 penny and 9 deferred shares of 1 pennyeach. Other than the change in par value the ordinary shares of 1 penny eachwill have the same rights as the existing ordinary shares, including voting,dividend and other rights. The deferred shares will effectively be worthless andcollectively have a negligible value following the capital reorganisation.All of the ordinary shares resulting from the capital reorganisation will, whenissued and fully paid, rank in full for all dividends and distributions made,paid or declared after the date of the capital reorganisation and otherwise paripassu in all respects. The ordinary shares can be held in certificated anduncertificated form. For those ordinary shares held in certificated form, newshare certificates will despatched shortly after these shares are admitted totrading. Application will be made to the UK Listing Authority and the London StockExchange for the ordinary shares of 1 penny resulting from the capitalreorganisation to be admitted to listing on the Official List and to trading onthe London Stock Exchange's main market for listed securities. It is expectedthat admission will become effective and that dealings in the ordinary shareswill commence at the same time as the suspension of trading in the Company'sordinary shares is lifted. Following the capital reorganisation the number of ordinary shares in issue willbe 91,788,604, giving the Company a market capitalisation of £4.6 million at themid-market price of 5 pence (the latest practicable date prior to the suspensionof trading in the ordinary shares of the Company). Shareholders approval for the capital reorganisation is being sought at anextraordinary general meeting ("EGM") convened for 11.00a.m. on 9 January 2006.At the EGM it is also being proposed to increase the Company's authorised sharecapital in order to enable any equity fundraising to take place. This proposedincrease will leave the Company with a balance of authorised but unissuedordinary share capital (which is not reserved for issue in respect ofoutstanding options) of 116,666,667 Ordinary Shares having a nominal value of£1,166,667 (representing 127.10 per cent. of the Company's issued share capital)which the Directors believe is an appropriate level of authorised but unissuedshare capital to cover any equity fundraising. Shareholder authority is also being sought at the EGM to permit the board toissue shares required to implement any fundraising and to provide an appropriatelevel of authorised but unissued share capital following completion of anyfundraising which the directors have authority to allot, subject always to thestatutory rights of pre-emption contained in section 89 of the Act. Thedisapplication of the statutory rights of pre-emption referred to above which isbeing proposed at the EGM is also required to implement any proposed fundraisingand to provide limited authority to allot shares for cash thereafter otherwisethan pro rata to shareholders. As the capital reorganisation will involve the creation of deferred shares theCompany will need to amend its articles of association to set out the rightsattaching to the deferred shares and this will also require shareholder approvalat the EGM. The rights attaching to the deferred shares (as reflected in the proposedamendments to the articles of association) will be as follows, namely: • no rights to participate in or receive any dividends declared made or paid bythe Company, • no right to receive notice of, attend or vote at any general or class meeting(other than a class meeting of the deferred shares) of the Company; • a limited right to a return of capital in a winding-up after the rights of theholders of the ordinary shares have been discharged in full and a sum of £1 hasbeen paid in respect of each issued ordinary share but no other right toparticipate in the assets of the Company; and • the approval of the directors of the Company shall be required for anytransfer of the deferred shares. As soon as the Company is in a position to inform shareholders fully of itsproposals to rectify its regulatory capital shortfalls a further circular willbe sent to shareholders prior to any fundraising being implemented. Furthershareholder approval will be required at that time to effect any suchfundraising. Enquiries: BBB plcJonathan Hall 02476 232010 Arden PartnersAndrew Raca, Director, Corporate Finance 0121 423 8941 End 15/12/05 This information is provided by RNS The company news service from the London Stock Exchange