TIDMCAML
RNS Number : 7720I
Central Asia Metals PLC
30 March 2015
30 March 2015
CENTRAL ASIA METALS PLC
("CAML" or the "Company")
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 15 April 2015 at the
offices of Field Fisher Waterhouse LLP, Room 9.22, Riverbank House,
2 Swan Lane, London EC4R 3TT to consider and vote on the
Resolution. The Circular will also shortly be available for
inspection at http://www.centralasiametals.com/company
information/reports presentations/
For further information contact:
Tel: +44 (0) 20
Central Asia Metals plc 7898 9001
Nick Clarke, CEO
Nigel Robinson, CFO
Peel Hunt LLP (Nominated Adviser & Joint Tel: +44 (0) 20
Broker) 7418 8900
Matthew Armitt
Ross Allister
Tel: +44 (0) 20
Mirabaud Securities LLP (Joint Broker) 7878 3362
Peter Krens
Tel: +44 (0) 20
Bell Pottinger 3772 2500
Lorna Cobbett
Background to and reasons for the Share Premium Cancellation
The Company was incorporated in 2005 and is the parent company
of the Group. 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 harvesting of copper
cathodes commenced on 29 April 2012. The plant has produced over
30,000 tonnes of copper in the 35 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. 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.
A total of $40.8 million has been returned to shareholders since
2012 (including dividends and share buy-backs), equating to 68% of
funds raised at the Company's IPO.
The Act governs and provides certain restrictions on 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 2013 (being the latest audited accounts of the
Company available as at the date of this document) the Company had
an accumulated positive balance on its profit and loss account of
$36,752,283 while the balance on the Company's share premium
account at that date was $nil (following the Company's previous
cancellation of its share premium account which took effect on 1
August 2013). The current amount standing to the credit of the
share premium account is $67,078,630.
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
$67,078,630, 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 help the Company
to continue with its dividend policy 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 13 May 2015. 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 as at the Effective Date are not prejudiced.
The Court may require the Company to give an undertaking, amongst
other matters, to 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. 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 non-consenting
creditors will be protected by the establishment of a blocked trust
bank account to cover sums owing to them so as to ensure that the
reserve arising on the Share Premium Cancellation can be treated as
distributable very shortly after the Effective Date. The Company
will offer such form of creditor protection as it may be advised is
appropriate in the circumstances.
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 help the Directors 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.
APPENDIX 1
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Date circular posted 30 March 2015
Latest time and date for 10.00 a.m. 13 April 2015
receipt of Form of Proxy
to be valid at the Extraordinary
General Meeting
Extraordinary General 10.00 a.m. on 15 April
Meeting 2015
Court hearing to confirm 13 May 2015 (1)
the Share 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 13 May 2015 (2)
If any of the above times or dates should change, the revised
times and/or dates will be notified to Shareholders by an
announcement to a Regulatory Information Service.
Notes:
1 This date is subject to any changes which may be imposed by the Court.
2 This date will depend on, amongst other things, the date on
which the Court confirms the Share Premium Cancellation.
APPENDIX 2
DEFINITIONS
"Act" the Companies Act 2006, as amended
"AIM" the market of that name operated
by London Stock Exchange plc
"Extraordinary the extraordinary general meeting
General Meeting" of the Company convened for 10.00
or "EGM" a.m. on 15 April 2015, notice of
which is set out in the Circular,
or any adjournment of it
"Board" or "Directors" the directors of the Company
"Cancellation the balance standing to the credit
Amount" of the share premium account of
the Company as at the Effective
Date
"Circular" the circular posted to Shareholders
today, containing the notice of
EGM
"Company" or Central Asia Metals plc
"CAML"
"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 owner
"Ordinary Shares" ordinary shares of $0.01 each in
the capital of the Company
"Relevant Creditor all amounts that would be owing
Amounts" to persons entitled to prove as
creditors of the Company in a notional
winding up of the Company as at
the Effective Date
"Resolution" the resolution set out in the notice
of the EGM
"Shareholders" the holders of Ordinary Shares
"Share Premium the proposed cancellation of the
Cancellation" Company's share premium account
as set out in the Resolution
"GBP" Pounds sterling, the lawful currency
the United Kingdom
"$" US dollars, the lawful currency
of the United States of America
Note to editors:
Central Asia Metals, an AIM-listed UK company based in London,
owns 100% of the Kounrad SX-EW copper facility in Kazakhstan. The
Company also has a 52% equity interest in Copper Bay Ltd, which is
a private company conducting a pre-feasibility study of the
Chañaral Bay Copper Project in Chile. At the 2014 UK Stock Market
Awards, the Company was named Best Basic Resources Plc. For further
information, please visit www.centralasiametals.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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