TIDMCAML
RNS Number : 9336G
Central Asia Metals PLC
13 June 2013
13 June 2013
Central Asia Metals plc
(the "Group", the "Company" or "CAML")
Proposed Share Premium Cancellation and Notice of Extraordinary
General Meeting
Central Asia Metals plc (AIM:CAML), a copper producing company
focused on base metals in Central Asia, today announces a proposed
Share Premium Cancellation in order to restructure the Company's
balance sheet so as to, subject to the protection of creditors,
increase the amount of distributable reserves. The Share Premium
Cancellation will permit the Company to continue to pay dividends
and to repurchase its Ordinary Shares as and when the Directors
decide this is appropriate.
The Company is today posting to Shareholders a circular (the
"Circular") containing details of a proposed Share Premium
Cancellation, together with formal notice of the Extraordinary
General Meeting, to be held at 10.00 a.m. on 2 July 2013 at the
Company's offices at 4/5 Park Place, London SW1A 1LP to consider
and vote on the Resolution. The Circular will also shortly be
available for inspection at www.centralasiametals.com.
Enquiries:
Central Asia Metals plc Nick Clarke +44 (0) 20 7898 9001
Nigel Robinson
Canaccord Genuity Limited Andrew Chubb +44 (0)20 7523 8000
Christopher Fincken
Mirabaud Securities LLP Peter Krens +44 (0)20 7878 3362
Pelham Bell Pottinger Charles Vivian +44 (0)20 7861 3232
Lorna Spears
Background to and reasons for the Share Premium Cancellation
The Group has developed and brought into production the Kounrad
Project. Construction of the plant at the Kounrad Project was
completed in early 2012 and the production of copper commenced on
29 April 2012. The plant has produced over 10,000 tonnes of copper
in just over twelve months since operations started.
The successful commencement of production has enabled the Board
to return significant funds to Shareholders through the combination
of a share buy-back programme and dividend payments. A share
buy-back authority was approved by Shareholders at the 31 May 2012
annual general meeting. As at 31 December 2012, 1,318,929 Ordinary
Shares had been purchased under this authority for a total of
$1,982,677 at a value weighted average price of 93.059 pence per
share. A further buy back authority was approved on 22 May
2013.
On 13 December 2012 the Board announced a dividend policy based
on the Company's annual dividend being calculated as a percentage
of the attributable revenues earned from the Kounrad Project at a
minimum level of 20 per cent. of such revenues, subject to the
Company's cash reserves providing a dividend cover of three times
or greater. Due to strong cash-flows generated by the Kounrad
Project during 2012, the Board set a target for 2012 to distribute
30 per cent. of the attributable revenue. On 27 March 2013, the
Directors recommended a final dividend for the year ending 31
December 2012 of 3.7 pence per Ordinary Share bringing, with the
previous payments of a special and an interim dividend, total
dividends for 2012 to 10.7 pence per share.
As at 31 December 2012, the Group had $33.8 million of cash in
the bank following the repayment to the parent company of $28.4
million from intercompany loans used to finance the Kounrad
Project.
Share Premium Cancellation
The Act restricts the circumstances in which a company may pay
dividends or return funds to its shareholders. In particular, it
provides that a public company may only purchase its own shares out
of distributable reserves or out of the proceeds of a fresh issue
of shares. Furthermore, a public company may only pay a dividend on
its shares out of its accumulated distributable reserves. It also
imposes limitations on the use of a company's capital reserves
including its share premium account.
As at 31 December 2012, the Company had an accumulated positive
balance on its profit and loss account of $7,994,686 while the
balance on the Company's share premium account at that date was
$61,431,533.
In order to create further distributable reserves (subject to
the protection of creditors), the Company is proposing to cancel
the whole of its share premium account. If confirmed by the Court
in the manner anticipated, this will create a reserve of
$61,431,533, which, once all Relevant Creditor Amounts have been
paid or the creditors owed such amounts have consented to the Share
Premium Cancellation or they have otherwise been provided for (as
more particularly described below), will be credited to the profit
and loss account of the Company thereby increasing available
distributable reserves by such amount. This will enable the Company
to continue with its dividend policy and share buyback programme
for as long as it is prudent to do so.
Under the Act, a public company may reduce or cancel its share
premium account if so authorised by its articles of association,
providing that it obtains the approval of its shareholders by
special resolution in general meeting and that the Court confirms
the reduction or cancellation. The Company is therefore seeking the
approval of Shareholders at the EGM to cancel the Company's share
premium account.
If approved by Shareholders the Company will, as soon as
practicable, apply to the Court for an appropriate Court Order. It
is expected the Court Order confirming the Share Premium
Cancellation will be made on or around 31 July 2013. The Share
Premium Cancellation will become effective on the Effective Date
soon thereafter.
The Court will be concerned to ensure that the interests of the
Company's creditors (if any) as at the Effective Date are not
prejudiced. The Court may require the Company to give an
undertaking to, amongst other matters, transfer the Cancellation
Amount to a non-distributable reserve until such time as all
creditors of the Company on the Effective Date have either
consented to the Share Premium Cancellation, have been satisfied or
have otherwise been provided for. The Company will give such an
undertaking as it may be advised is appropriate in the
circumstances. For so long as the reserve remains undistributable
pursuant to the above undertaking, it will be unavailable for the
purposes of paying dividends and financing repurchases of Ordinary
Shares. On the basis that the Company does not trade of its own
account and has relatively few creditors who are of a short-term
nature, it is anticipated that the reserve arising on the Share
Premium Cancellation should be treated as distributable within a
month of the Effective Date.
Following the Share Premium Cancellation, and subject to any
undertaking given to the Court, the distributable reserves of the
Company will be increased as a result of the distributable reserve
resulting from the Share Premium Cancellation. This, together with
future distributable profits generated after the Effective Date,
will ensure that the Directors are able to continue the Company's
dividend policy. It should be noted that the Share Premium
Cancellation will not, in itself, involve any distribution or
repayment of capital by the Company to any Shareholder or other
person, and will not reduce the Company's underlying assets
Circular and Notice of Extraordinary General Meeting
A circular setting out the background to Share Premium
Cancellation and a notice convening the EGM for at 10.00 a.m. on 2
July 2013, is being sent to Shareholders today and will also be
made available shortly for inspection at
www.centralasiametals.com.
APPENDIX 1
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Date circular posted 13 June 2013
Latest time and date for receipt 10.00 a.m. on 28 June 2013
of Form of Proxy to be valid at
the Extraordinary General Meeting
Extraordinary General Meeting 10.00 a.m. on 2 July 2013
Court hearing to confirm the Share 31 July 2013
Premium Cancellation
Effective Date the date on which the Court Order
confirms the Share Premium Cancellation
(and certain accompanying documents
are registered by Companies House)
which is expected to be on or
around 1 August 2013
APPENDIX 2
DEFINITIONS
"Act" the Companies Act 2006, as amended
"AIM" the market of that name operated by London
Stock Exchange plc
"Extraordinary General the extraordinary general meeting of the Company
Meeting" or "EGM" convened for 10.00 a.m. on 2 July 2013
"Board" or "Directors" the directors of the Company
"Cancellation Amount" the balance standing to the credit of the
share premium account of the Company as at
the Effective Date
"Company" or "CAML" Central Asia Metals plc
"Court" the High Court of Justice of England and Wales
"Court Order" the order to be sought by the Company from
the Court confirming the Share Premium Cancellation
"Effective Date" the date that the Court Order confirming the
Share Premium Cancellation is registered with
the Registrar of Companies
"Form of Proxy" the form of proxy for use by Shareholders
at the Extraordinary General Meeting
"Group" the Company and its subsidiaries
"Kounrad Project" the solvent extraction-electrowinning (SX-EW)
copper plant at the Kounrad mine site in central
Kazakhstan, of which the Group is the operator
and 60 per cent. owner
"Ordinary Shares" ordinary shares of $0.01 each in the capital
of the Company
"Relevant Creditor all amounts that would be owing to persons
Amounts" entitled to prove as creditors of the Company
in a notional winding up of the Company as
at the Effective Date
"Resolution" the resolution set out in the notice of the
EGM
"Shareholders" the holders of Ordinary Shares
"Share Premium Cancellation" the proposed cancellation of the Company's
share premium account as set out in the Resolution
"$" US dollars, the lawful currency of the United
States of America
This information is provided by RNS
The company news service from the London Stock Exchange
END
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