CRK Clerkenwell

    RNS Number : 3704L
  Clerkenwell Ventures PLC
  09 January 2009
   


    9 January 2009
    Clerkenwell Ventures plc ("Company" or "Clerkenwell Ventures")

    Recommended Proposals for the return of approximately �26.8 million to Shareholders and 
Notice of General Meeting


    Further to its announcement on 5 December 2008, Clerkenwell Ventures today announces that it has today sent to Shareholders the Annual
Report, Circular, Notice of General Meeting and Form of Proxy relating to the proposed repayment of approximately �26.8 million in aggregate
to Shareholders by way of a Return of Capital. For every Ordinary Share held at the Record Date a Shareholder will receive 32.1 pence in
cash. As detailed in the Annual Report as at 30 September 2008, the Company had net assets of �29.8 million and cash of �29.9 million.  

    On 5 December 2008, the Board announced that as the Company was unlikely to make any acquisitions prior to 28 February 2009 and in
response to dramatically altered market conditions, it had decided to explore in detail the process for returning capital to Shareholders
and that it was investigating the most efficient method for achieving this.

    In order to effect this repayment, the Directors propose that each Shareholder will receive, by way of capitalisation of part of the
Company's share premium account, 272 "B" Shares credited as fully paid up at par for every Ordinary Share held on the Record Date. The
Directors then propose to implement a reduction of capital by the cancellation of the "B" Shares and the reduction of the nominal value of
the Ordinary Shares returning approximately �26.8 million in aggregate to Shareholders. 

    The Directors are recommending that:

    (i) the Bonus Issue be implemented with effect from the Record Date (expected to be 5.00 pm on Tuesday 3 March 2009); and
    (ii) subject to the approval of the Court, the capital of the Company be reduced by the cancellation of the "B" Shares in consideration
of the payment to holders thereof of 0.1 pence per "B" Share and the reduction of the nominal value of Ordinary Shares in consideration of
the payment to holders thereof of 4.9 pence per Ordinary Share.

    The effect of the Bonus Issue and Reduction of Capital will be as follows:

    for every Ordinary Share held at the Record Date a Shareholder will receive 32.1 pence in cash

    Pursuant to the Reduction of Capital there will be no change in the number of Ordinary Shares in issue. However, following the Reduction
of Capital it is proposed that there will be a consolidation of Ordinary Shares into New Ordinary Shares and the Directors believe that this
Consolidation is necessary to maintain the share price of the Company.

    Background to the Directors' Proposals

    Since admission of the Company's shares to trading on AIM in October 2004, the Directors have been seeking acquisitions in line with its
stated investing strategy. The Company's investing strategy, as described in its Admission Document and reiterated in its circular for its
Extraordinary General Meeting dated 4 August 2007 ("2007 Circular") is to seek to acquire leisure businesses with the potential for rapid
growth and/or above average cash flow, strong operational management and a proven business model offering attractive returns on invested
capital.

    In the Company's 2007 Circular, the Board committed to consult with Shareholders and return capital to them in the event that the
Company did not make any acquisitions by 28 February 2009.

    Since the completion of the Company's most recent equity fundraising in September 2007, both valuations and debt availability across the
leisure sector have been substantially impacted by economic conditions. Added to this, good businesses without a special need have been
reluctant to crystallise value at current levels. Accordingly, the Company withdrew from several negotiations where valuations were
considered by the Board to be unrealistic.

    It is now the view of the Board that due to a lack of investment opportunity and adverse market conditions the Company is unlikely to
make any acquisitions by 28 February 2009 and that surplus capital should be returned to Shareholders.

    The Company proposes to continue to seek acquisitions in line with its stated investing strategy following completion of the Proposals.
Any proposed changes to the Company structure, its Board or its investing strategy will be announced as appropriate.

    In accordance with AIM Rule 15 the Company is seeking re-approval of its stated investing strategy in the Resolutions. Pursuant to AIM
Rule 15 following the Return of Capital the Company will be treated as an investing company for the purposes of the AIM Rules and the
Company will have to make an acquisition or otherwise implement its approved investing strategy within 12 months of having received the
consent of Shareholders at the General Meeting.

    Bonus Issue and rights of "B" Shares

    272 "B" Shares will be allotted for every Ordinary Share held on the Record Date by way of bonus issue through the capitalisation of
part of the Company's share premium account. The "B" Shares will not be admitted to trading on AIM or any other market. No share
certificates will be issued in respect of "B" Shares. The "B" Shares will be non-renounceable and non-transferable.

    The "B" Shares will have no rights to participate in the profits of the Company. The holders of "B" Shares will not be entitled, in
their capacity as holders of such shares, to receive notice of any general meeting of the Company or to attend, speak or vote at any such
general meeting. On a return of capital on a winding up or otherwise there shall be paid to the holders of "B" Shares 0.1 pence in respect
of each "B" Share held by them.

    After the Bonus Issue, the Company will have in issue 22,697,646,288 "B" Shares. It is anticipated that the "B" Shares will only be in
issue for one day and then it is proposed that they will be cancelled pursuant to the Reduction of Capital.

    The Reduction of Capital

    Under the Act, a company may, with the sanction of a special resolution and the consent of the Court, reduce or cancel existing paid up
share capital which is in excess of its requirements. It may apply the sums resulting from such reduction in repaying holders of the share
capital the amounts paid up on the share capital held by them which is reduced or cancelled. This is what the Board proposes to do in
relation to the capital paid up on the Ordinary Shares and the "B" Shares which it considers to be in excess of the Company's requirements.
This is the mechanism by which Shareholders will receive 4.9 pence for each Ordinary Share and 0.1 pence for each "B" Share which they hold
upon the Reduction of Capital taking place. The Reduction of Capital is subject to the approval of the Court. The Company intends that an
application will be made for the Court to approve the Reduction of Capital promptly after the General Meeting provided that the Resolutions
shall have been passed. Shareholders should note that if, for any reason, the Court declines to approve the Reduction of Capital, then the Return of Capital thereunder will not take place and
the Company would then make an application for the Court to cancel all of the "B" Shares. However, your Board has taken advice and, on the
basis of the position as it currently exists, it has been advised that there is no reason why the Reduction of Capital should not be
confirmed by the Court.

    It is anticipated that Shareholders will be sent cheques for the proceeds of the Return of Capital by Friday 6 March 2009.

    The Consolidation

    Assuming that the Consolidation is approved at the General Meeting, it is anticipated that following the Reduction of Capital the
Ordinary Shares will be consolidated into New Ordinary Shares on the basis of one New Ordinary Share for every ten existing Ordinary
Shares.

    The rights attaching to the New Ordinary Shares, including voting and dividend rights, will be the same as the rights attaching to the
Ordinary Shares.

    Trading in the New Ordinary Shares is expected to commence on AIM on the business day following the date that the Consolidation becomes
effective. Following the Consolidation, share certificates will be called in and new share certificates will be issued. For Shareholders who
hold shares through the CREST system, the New Ordinary Shares are expected to be credited to CREST accounts on the business day following
the date that the Consolidation becomes effective. Following the Consolidation becoming effective and pending the receipt of new share
certificates, transfers of New Ordinary Shares held in certificated form will be certified against the register of members of the Company.

    If Shareholders would otherwise be entitled to a fraction of a New Ordinary Share on such Consolidation, then the Company shall arrange
for the aggregate and sale of such fractional entitlement and shall retain the net proceeds of sale for the benefit of the Company and no
Shareholder shall himself have any entitlement to a fraction of a New Ordinary Share.

    Benefits of the Proposals

    The Directors believe that the amount of paid up share capital is surplus to the Company's requirements and that part of it should be
returned to Shareholders for them to deploy elsewhere. The Company has approximately �24.9 million standing to the credit of its share
premium account. The Directors believe that the Consolidation will assist in the maintenance of the Company's share price on AIM.

    Share Option Plan

    Should the Proposals be completed, the exercise price of Options and the number of Ordinary Shares subject to Options under the Share
Option Plan will be amended to take account of the implementation of the Proposals. It is intended that Optionholders continue to hold
Options after implementation of the Proposals which have a comparable commercial position to the Options that they currently hold in terms
of the option price and the percentages of the revised issued share capital that is subject to the Options.

    As required under the Share Option Plan rules, the Company's advisers, Seymour Pierce, have confirmed, in writing that they consider the
proposed amendments to the existing Options to be fair and reasonable. 

    Long Term Incentive Plan

    Given the significant changes to the Company's share capital that will result from the implementation of the Proposals, the Company
intends to invite holders of LTIP awards to surrender these awards in return for new awards under the LTIP. These new awards can vest only
if the Company's share price grows by more than a compound 20% per annum from the market price when awards are made following completion of
the Proposals. The new awards cannot normally vest before March 2011.

    The Company's advisers, Seymour Pierce, have confirmed, in writing, that they consider the proposals regarding LTIP awards to be fair
and reasonable.

    General Meeting

    The Proposals set out in this announcement require the approval of the Shareholders. Accordingly, a General Meeting will be held at The
Real Greek, 142 St John Street, London EC1V 4UA at 10.00 am on Monday 2 February 2009.

    At this meeting the Resolutions will be proposed. The ordinary resolutions are required to receive and adopt the report of the
directors, the financial statements and the report of the auditors for the period ended 30 September 2008, to approve the Company's
investing strategy and to approve the Return of Capital for the purposes of AIM Rule 15 as under such AIM Rule the Return of Capital is
deemed to be a disposal resulting in a fundamental change of business. The special resolutions are required to make the Bonus Issue, the
Reduction of Capital, the Return of Capital and the Consolidation.

    It is intended that the ordinary resolution for the purposes of AIM Rule 15 and the special resolutions are interconditional with such
resolutions incapable of being passed without the others being passed.

    Recommendation

    The Directors consider that the Proposals are in the best interests of the Company and Shareholders as a whole. Accordingly, the
Directors unanimously recommend Shareholders to vote in favour of the Resolutions.

    The Directors intend to vote in favour of the Resolutions in respect of their own beneficial holdings amounting, in aggregate, to
2,096,707 Ordinary Shares (representing approximately 2.5 per cent. of the issued ordinary share capital of the Company as at the date of
this announcement).

    Expected timetable of key events

 General Meeting                            10.00 am on Monday 2 February 2009
 Record Date and Bonus Issue                   5.00 pm on Tuesday 3 March 2009
 Court Hearing                                          Wednesday 4 March 2009
 Expected Return of Capital through                     By Friday 6 March 2009
 despatch of cheques to Shareholders

    These dates (except of the General Meeting) are estimates only, being subject to agreement of hearing dates with the Court. The
timetable assumes that the General Meeting is not adjourned as a result of there being no quorum, or for any other reason. If there is an
adjournment, all subsequent dates are likely to be later than those shown. Any changes will be notified to Shareholders by an announcement
on the Regulatory News Services of the London Stock Exchange.

    All references to time in this announcement are to London time. Definitions
    In this announcement the following expressions shall (unless the context requires otherwise) have the following meanings:
 "Act"                       the Companies Act 2006
 "Admission Document"        the admission document relating to the admission
                             of the Company's Ordinary Shares to trading on
                             AIM, dated 25 October 2004
 "AIM"                       the AIM Market of the London Stock Exchange
 "AIM Rules"                 the AIM Rules for Companies published by the
                             London Stock Exchange
 "Annual Report"             the report and financial statements for the year
                             ended 30 September 2008
 ""B" Shares"                the "B" shares of 0.1 pence each in the capital
                             of the Company to be created by the Bonus Issue
 "Bonus Issue"               the bonus issue of 272 "B" shares for every
                             Ordinary Share held by each Shareholder on the
                             Record Date
 "Circular"                  the Company's circular to shareholders dated 9
                             January 2009
 "Company" or "Clerkenwell"  Clerkenwell Ventures plc
 "Consolidation"             the proposed consolidation of the Ordinary Shares
                             to New Ordinary Shares on a 10 for 1 basis to be
                             carried out after the Reduction of Capital
                             pursuant to the Resolutions
 "Court"                     the High Court of England and Wales
 "Court Hearing"             the hearing of the Company's claim for the
                             confirmation by the Court of the Reduction of
                             Capital
 "Directors" or "Board"      the directors of the Company 
 "General Meeting"           the general meeting of the Company to be held at
                             The Real Greek, 142 St John Street, Clerkenwell,
                             London EC1V 4UA at 10.00 am on Monday 2 February
                             2009
 "Form of Proxy"             the form of proxy accompanying this document for
                             use by Shareholders in connection with the
                             General Meeting
 "London Stock Exchange"     London Stock Exchange plc
 "LTIP"                      the Clerkenwell Ventures plc 2007 Long Term
                             Incentive Plan
 "LTIP Participants"         holders of awards granted under the LTIP
 "New Ordinary Shares"       after the Consolidation, the ordinary shares of
                             0.1 pence each in the capital of the Company
 "Notice"                    the notice convening the General Meeting
 "Optionholders"             holders of Options
 "Options"                   options granted under the Share Option Plan
 "Ordinary Shares"           the existing issued ordinary shares of 5 pence
                             each in the capital of the Company 
 "Proposals"                 the Bonus Issue, the Reduction of Capital, the
                             Return of Capital and the Consolidation
 "Record Date"               5.00 pm on the business day immediately preceding
                             the day of the Court Hearing
 "Reduction of Capital"      the proposed cancellation of the "B" Shares and
                             reduction of the nominal value of the Ordinary
                             Shares
 "Resolutions"               the resolutions to be proposed as ordinary and
                             special resolutions at the General Meeting as
                             detailed in the Notice
 "Return of Capital"         the proposed payment of capital to Shareholders
                             following the proposed Reduction of Capital 
 "Share Option Plan"         the Clerkenwell Ventures plc 2007 Share Option
                             Plan
 "Shareholder(s)"            holder(s) of Ordinary Shares

    The Circular will shortly be available to view on the Company's website, www.clerkenwellventures.com. In addition, copies of the
Circular will be available for inspection at the offices of Pinsent Masons LLP, CityPoint, One Ropemaker Street, London EC2Y 9AH during
normal business hours on any weekday (Saturday, Sundays and public holidays excepted) until the date of the General Meeting.


    Enquiries

    Clerkenwell Ventures PLC
    David Page, Non-executive Chairman Telephone: 07836 346934
    Stefan Borson, Corporate Development Director 07824 638553

    Seymour Pierce Limited 
    Nicola Marrin, Telephone: 020 7107 8000




This information is provided by RNS
The company news service from the London Stock Exchange
 
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