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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Grampian | LSE:GRMP | London | Ordinary Share | GB00B6WZ0930 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 470.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:1318P Grampian Hldgs PLC 21 December 2001 21 December, 2001 GRAMPIAN HOLDINGS P.L.C. PROPOSED RETURN OF CAPITAL AND CHANGE OF NAME Not for release, publication or distribution in or into the United States, Canada, Australia, Japan or the Republic of Ireland Highlights - Following the receipt of approximately #62 million from the sale of EWM and related properties, approximately #45m of cash will be returned to Shareholders subject to their approval at an EGM to be held on 18 January 2002, and subsequent Court approval - To effect the return of cash, a certain proportion of Shareholders' existing holdings will be cancelled in return for a cash amount. The Board currently expects Ordinary Shares to be cancelled at a price of between 80p and 90p - Shareholders may also apply for either a higher or lower amount of cash or shares, subject to availability, and a Loan Note Alternative will also be available - With effect from 1 January 2002, Andrew Malcolm will become Chief Executive of the Group; Mike McGill, formerly Group Financial Controller of John Menzies plc, will become Group Finance Director and John Douglas, the Deputy Company Secretary, will become Group Company Secretary. These appointments follow the retirement of David McGibbon as Finance Director and Company Secretary on 31 December 2001 - David McGibbon and Colin Birrell, formerly Chief Executive of EWM, will both remain as non-executive directors until after the EGM. Further Board changes will follow in due course to reflect the new focus and size of the Group - Subject to Shareholder approval, the Company will be renamed The Malcolm Group p.l.c. after the Group's remaining trading entity, the logistics and construction services company, The Malcolm Group Limited - Commenting on the proposed return of cash, David McGibbon, Finance Director, said: "It has been a lengthy, but ultimately successful process to realise for shareholders a cash return of over 45 per cent of the Group's current market capitalisation. Shareholders will also retain an investment in a focused and growing logistics and construction services business." Enquiries Grampian David McGibbon 0141 357 2000 Deutsche Bank Jeremy Lucas 020 7545 8000 Cazenove Malcolm Moir 020 7588 2828 Holborn Public Relations David Bick 020 7929 5599 Media House Tom Cassidy 0141 226 3700 Deutsche Bank and Cazenove, which are regulated in the United Kingdom for the conduct of designated investment business by the Financial Services Authority, are acting for Grampian and no one else in connection with the Proposal and will not be responsible to anyone other than Grampian for providing the protections afforded to their respective clients or for providing advice in relation to the Proposal. THIS SUMMARY SHOULD BE READ IN CONJUNCTION WITH THE FULL TEXT OF THE FOLLOWING ANNOUNCEMENT. THE APPENDIX TO THE FOLLOWING ANNOUNCEMENT CONTAINS DEFINITIONS OF CERTAIN WORDS AND EXPRESSIONS USED IN THIS SUMMARY AND THE FOLLOWING ANNOUNCEMENT. 21 December, 2001 GRAMPIAN HOLDINGS P.L.C. PROPOSED RETURN OF CAPITAL AND CHANGE OF NAME Not for release, publication or distribution in or into the United States, Canada, Australia, Japan or the Republic of Ireland. Introduction On 25 July 2001, Grampian completed the disposal of EWM following the approval of Shareholders. In addition, the Board announced today that it had completed the disposal of certain properties occupied by the EWM Group, which were not included in the disposal of EWM. The aggregate proceeds received by Grampian from these disposals is approximately #62 million (before expenses), inclusive of the repayment of approximately #2.2 million of inter-company indebtedness. In a circular to Shareholders dated 6 July 2001, the Board stated its intention to return to Shareholders approximately #45 million of these proceeds, with the balance being retained to support the future development of The Malcolm Group. The purpose of this announcement is to set out the Board's proposals for returning cash to Shareholders, which will require Shareholder approval and the confirmation of the Court, and for a change of name of the Company. Further details will be set out in a Circular to be sent to Shareholders today. An EGM to approve these proposals is being convened for 18 January 2002. In summary, the effect of the Proposal is that part of each Shareholder's holding of Ordinary Shares on the Record Date will be cancelled for cash, with the balance of such holding being retained. The price at which Ordinary Shares are to be cancelled will be fixed and announced by the Board following the EGM. The Board currently intends to fix this price at a premium to the market price prevailing immediately following the EGM. As at 20 December 2001, the latest practicable date prior to this announcement, the closing middle market price of an Ordinary Share (as derived from the Daily Official List) was 81.5p. Against that background, the Board currently expects that the Cancellation Price will be between 80p and 90p. This will, however, be reviewed in the light of prevailing market conditions following the EGM. Background to, and reasons for, the Proposal The EWM Disposal and the Property Disposal were consistent with the Board's stated strategy of re-focusing the Group's operations and disposing of non-core businesses in order to maximise Shareholder value. They concluded a series of disposal transactions over the last four years. As a result, the Group is now able to focus all of its resources on further developing The Malcolm Group. However, the disposals have left Grampian with surplus capital. In the circular to Shareholders dated 6 July 2001, the Board stated its intention to consider the most appropriate manner of returning cash to Shareholders. The Board has now consulted with a cross-section of Shareholders and with the Company's advisers and has considered various possible methods of returning cash to Shareholders. The Board has concluded that the Proposal set out in this announcement represents the best means of achieving this, taking into account the interests of the Company and the Shareholders as a whole. Grampian has insufficient distributable reserves to effect in full a return of #45 million of cash to Shareholders. Accordingly, the Proposal will involve a Capital Reduction, which requires the confirmation of the Court. The Proposal Under the Proposal, subject to Shareholder approval and Court confirmation, part of Grampian's issued share capital on the Record Date will be cancelled for cash. The amount of Grampian's issued share capital which will be cancelled will depend, inter alia, upon the Cancellation Price fixed by the Board. (a) Basic Proposal Once the Board has fixed the Cancellation Price, it will announce the terms of the Basic Proposal. These terms will be clearly set out in the Forms of Election to be sent to Qualifying Shareholders after the EGM. Under the Basic Proposal, Qualifying Shareholders will receive a cash payment equal to the Cancellation Price multiplied by the number of Ordinary Shares held by them on the Record Date which are cancelled. All Qualifying Shareholders will be subject to the Basic Proposal. The terms of the Basic Proposal will be set so as to provide Qualifying Shareholders with a total capital return of approximately #45 million. The precise amount of the total capital return will depend upon the number of Ordinary Shares (if any) issued after the terms of the Basic Proposal have been announced, and before the Record Date, upon the exercise of options under the Grampian Share Option Schemes or otherwise. It will also depend upon the effect of the scaling up or down of fractions of Ordinary Shares which would otherwise fall to be cancelled. The Board intends to set the terms of the Basic Proposal such that the total amount of capital to be returned to Qualifying Shareholders will be no more than #50,000 above or below #45 million (subject to the effect of any further issues of Ordinary Shares as described above). For example, if the Board were to fix the Cancellation Price at 85p (being the mid-point of the indicative range of 80p to 90p per Ordinary Share), that would require the cancellation of 52,941,176 Ordinary Shares in order to return #45 million to Qualifying Shareholders (52,941,176 x 85p = #45 million). The terms of the Basic Proposal will be arrived at by dividing the number of Ordinary Shares in issue (currently 116,483,593) by the number of Ordinary Shares which would require to be cancelled to return #45 million (52,941,176), the result of which is approximately 2.20x. Accordingly, assuming Grampian's issued share capital does not change, the terms of the Basic Proposal would be 454 Ordinary Shares to be cancelled for every 1,000 Ordinary Shares held (and so in proportion for any other number of Ordinary Shares held) (454 x 2.2 = approximately 1,000). Assuming a Cancellation Price of no less than 80p, and no more than 90p, the maximum and minimum number of Ordinary Shares to be cancelled would be, respectively, 56,261,575 and 49,971,461 (subject only to the effect of the treatment of fractions). By way of illustration only, the following table demonstrates what the effect of the Basic Proposal will be, at different Cancellation Prices, for a holder of 1,000 Ordinary Shares: Cancellation Ordinary Shares cancelled Cash Ordinary Shares Price received retained 80p 483 #386.40 517 85p 454 #385.90 546 90p 429 #386.10 571 Notes: The above table reflects the number of Ordinary Shares currently in issue of 116,483,593. The precise effect will depend upon the number of Ordinary Shares in issue immediately after the EGM. It also reflects the scaling up or down of fractions of an Ordinary Share which would otherwise fall to be cancelled. The Cancellation Price fixed by the Board will not affect the amount of cash receivable by Qualifying Shareholders under the Basic Proposal (save for the effect of the treatment of fractions). The Cancellation Price will, however, affect the number of Ordinary Shares to be cancelled under the Basic Proposal (and therefore the number of Ordinary Shares to be retained). In theory, the overall value of Ordinary Shares retained by each Qualifying Shareholder will be the same, regardless of the Cancellation Price. (b) Excess Elections The Board recognises that Qualifying Shareholders may wish to retain more Ordinary Shares (thereby receiving less cash), or receive more cash (thereby retaining fewer Ordinary Shares), than will be available to them under the Basic Proposal. Accordingly, any Qualifying Shareholder may make an Excess Election under which he may elect to have all, some or none of his Ordinary Shares cancelled. An Excess Election may (depending upon the extent to which it is met) have the effect of varying the amount of cash a Qualifying Shareholder receives and the number of Ordinary Shares he retains. However, the total amount of cash available, and the total number of Ordinary Shares to be cancelled, under the Proposal will not vary, and as a result Excess Cash Elections will be scaled down to the extent that there are insufficient Excess Shares Elections, and vice versa. If Qualifying Shareholders make no Excess Election, they will receive cash, and retain Ordinary Shares, on the terms of the Basic Proposal. The effect of the Proposal is that Qualifying Shareholders will retain their proportionate interest in the issued share capital of the Company (subject only to the effect of the treatment of fractions) save to the extent that they make an Excess Election which is satisfied in whole or in part. Forms of Election, which will enable Qualifying Shareholders to make an Excess Election, are expected to be despatched on 22 January 2002, assuming the Reduction Resolution is duly passed at the EGM. Further details of the Proposal, including Excess Elections, will be set out in the Circular. Loan Note Alternative Qualifying UK Shareholders will be able to elect to receive Loan Notes in lieu of all or part of the cash amount to which they would otherwise be entitled under the Proposal. However, if valid elections for the Loan Note Alternative are not received in respect of at least #2.0 million in nominal amount of Loan Notes, no Loan Notes will be issued unless Grampian, in its sole discretion, determines otherwise. For regulatory reasons, the Loan Note Alternative is not being made available to Overseas Shareholders. Forms of Election, which will enable Qualifying UK Shareholders to elect for the Loan Note Alternative, are expected to be despatched on 22 January 2002, assuming the Reduction Resolution is duly passed at the EGM. Further details of the Loan Note Alternative will be set out in the Circular. Taxation In summary, it is anticipated that the receipt by a Shareholder of cash under the Proposal will generally be treated as a part disposal for the purposes of UK taxation of chargeable gains. Shareholders who are in any doubt as to their taxation position should consult their independent professional adviser. Court confirmation The Proposal involves a reduction of Grampian's capital by means of the cancellation of the Cancellation Shares and the cancellation of the whole of Grampian's share premium account and capital redemption reserve (which currently stand at approximately #19.1 million and #2.8 million, respectively). The resulting credit in Grampian's books of account, together with certain of Grampian's profit and loss reserves, will be applied in returning capital to Shareholders pursuant to the Proposal. In addition to Shareholder approval, the Capital Reduction requires the confirmation of the Court. In any application to the Court of this nature, the Court's primary concern is to ensure that the applicant's creditors are adequately protected. Having obtained professional advice, the Board is confident that it should be able to satisfy this concern and secure the necessary Court confirmation, but there can be no certainty about this. If, for any reason, the Capital Reduction does not become effective by 5.00 pm on 20 May 2002, the Proposal will not proceed. In that event, the Board will write to Shareholders again with alternative proposals for a cash return to Shareholders of such amount as can practicably be accommodated by Grampian's available distributable reserves, without the need for Court confirmation. This amount is likely to be not less than #30 million. Benefits of the Proposal The Board believes that, if implemented, the Proposal will: - reduce Grampian's cost of capital through the repayment of surplus equity, thereby enhancing its earnings per share; and - enable Qualifying Shareholders to benefit from a partial realisation of their investment on attractive terms. The return of capital under the Proposal will be financed from Grampian's existing cash resources and banking facilities, allowing Grampian to put in place a more appropriate long term funding structure. The Board is satisfied that, following implementation of the Proposal, the Group will have sufficient resources available to it for its future development. Dividend policy The Board has historically pursued a progressive dividend policy and intends to continue with that policy, subject to an adequate level of dividend cover, future trading and the development needs of the Group and having regard to the level of cash being returned to Qualifying Shareholders under the Proposal. Grampian Share Option Schemes Options outstanding under the Grampian Share Option Schemes will not be affected by the Proposal. Further details will be set out in the Circular. Change of name Over the last four years, the Group has disposed of a number of disparate businesses and is now focused upon The Malcolm Group. The Board therefore believes that now is an appropriate time to reflect this transformation through a change of the Company's name. Accordingly, subject to Shareholder approval, the Board proposes to change the Company's name to "The Malcolm Group p.l.c.". Board changes With effect from 1 January 2002, Andrew Malcolm will become Chief Executive of the Group. Mike McGill, formerly Group Financial Controller at John Menzies plc, will become Group Finance Director and John Douglas, currently Grampian's Deputy Company Secretary, will be appointed Group Company Secretary. These appointments follow the retirement of David McGibbon as Finance Director and Company Secretary on 31 December 2001. David McGibbon and Colin Birrell, formerly Chief Executive of the EWM Group, and currently a non-executive director, will both remain as non-executive directors until after the EGM. The Board expects to announce further Board changes in the period ahead to reflect the focus and size of the Group going forward. Enquiries Grampian David McGibbon 0141 357 2000 Deutsche Bank Jeremy Lucas 020 7545 8000 Cazenove Malcolm Moir 020 7588 2828 Holborn Public Relations David Bick 020 7929 5599 Media House Tom Cassidy 0141 226 3700 Deutsche Bank and Cazenove, which are regulated in the United Kingdom for the conduct of designated investment business by the Financial Services Authority, are acting for Grampian and no one else in connection with the Proposal and will not be responsible to anyone other than Grampian for providing the protections afforded to their respective clients or for providing advice in relation to the Proposal. DEFINITIONS The following definitions apply throughout this announcement, unless the context otherwise requires: "Basic the proposal summarised in paragraph (a) under "The Proposal" Proposal" in this announcement, further details of which will be set out in the Circular; "Board" or the directors of Grampian; "Directors" "Cancellation the price determined by the Board at which Ordinary Shares are Price" to be cancelled pursuant to the Proposal; "Cancellation the Ordinary Shares which are to be cancelled pursuant to the Shares" Proposal; "Cazenove" Cazenove & Co. Ltd; "Capital the proposed reduction of capital of Grampian by the Reduction" cancellation of the Cancellation Shares, cancellation of the share premium account and cancellation of the capital redemption reserve, details of which will be set out in the Circular; "Circular" the circular giving further details of the Proposal to be sent to Shareholders; "Court" the High Court of Justice in England; "Daily Official the Daily Official List published by London Stock Exchange Plc; List" "Deutsche Bank" Deutsche Bank AG London; "Elections" the Excess Elections and the election for the Loan Note Alternative, or any of them, as the context may require; "EWM" The Edinburgh Woollen Mill Limited; "EWM Disposal" the disposal by Grampian of EWM, which was completed on 25 July 2001; "EWM Group" EWM and its subsidiaries; "Excess Cash the election to cancel more Ordinary Shares for cash at the Election" Cancellation Price than would be cancelled under the Basic Proposal; "Excess the Excess Cash Election and the Excess Shares Election, or Elections" either of them, as the context may require; "Excess Shares the election to retain more Ordinary Shares than would be Election" retained under the Basic Proposal; "Extraordinary the extraordinary general meeting of the Company to be held on General 18 January 2002 (or any adjournment thereof), notice of which Meeting" or will be set out in the Circular; "EGM" "Form of the form of election for use by Qualifying Shareholders in Election" connection with the Excess Elections and by Qualifying UK Shareholders in connection with the Loan Note Alternative; "Grampian" or Grampian Holdings p.l.c.; "Company" "Grampian Share the Grampian Holdings 1994 Executive Share Option Scheme, the Option Schemes" Grampian Holdings Executive Share Option Scheme, the Grampian Holdings Savings-Related Share Option Scheme and the Grampian Holdings Sharesave Scheme; "Grampian ordinary shares of 25p each in the capital of Grampian; Shares" or "Ordinary Shares" "Group" Grampian and its subsidiaries; "LIBOR" London Inter-Bank Offered Rate; "Loan Note the opportunity for Qualifying UK Shareholders to elect to Alternative" receive Loan Notes in lieu of all or part of the cash amount to which they would otherwise be entitled under the Proposal; "Loan Notes" unsecured loan notes 2011 to be issued to Qualifying UK Shareholders who validly elect to receive the Loan Note Alternative under the Proposal; "Overseas Shareholders who are resident in countries other than the UK; Shareholders" "Property the disposal of certain properties occupied by EWM Group, which Disposal" was completed and announced on 20 December 2001; "Proposal" the proposals summarised in this announcement and to be set out in the Circular for a return of capital to Shareholders, including (without limitation) the Basic Proposal, the Elections and the Capital Reduction; "Qualifying Shareholders whose names are on the Register at the Record Shareholders" Date; "Qualifying UK Qualifying Shareholders who are resident in the UK; Shareholders" "Record Date" the record date determined by the Board for the purposes of the Proposal which will be set out in the Circular; "Reduction the resolution for the Capital Reduction to be set out in the Resolution" notice of EGM in the Circular; "Register" the register of members of Grampian; "Shareholders" holders of Ordinary Shares; "The Malcolm W.H. Malcolm and its subsidiaries; Group" "UK" or "United the United Kingdom of Great Britain and Northern Ireland; and Kingdom" "W.H. Malcolm" W.H. Malcolm Limited, a wholly owned subsidiary of Grampian.
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